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Firm Pay and Worker Search

Author

Listed:
  • Caldwell, Sydnee

    (University of California at Berkeley & National Bureau of Economic Research (NBER))

  • Haegele, Ingrid

    (Ludwig-Maximilians Universität München und Institut für Arbeitsmarkt- und Berufsforschung (IAB))

  • Heining, Jörg

    (Institute for Employment Research (IAB), Nuremberg, Germany)

Abstract

"Whether and how workers search on the job depends on their beliefs about pay and working conditions in other firms. Yet little is known about workers’ knowledge of outside pay. We use a large-scale survey of full-time German workers, linked to their Social Security records, to elicit pay expectations and preferences over specific outside firms. Workers believe that they face considerable heterogeneity in their outside pay options, and direct their search toward firms they believe would pay them more.Workers’ expected firm-specific pay premia are highly correlated with pay policies observed in administrative records and with workers’ valuations of firm-specific amenities.Most workers are unwilling to search for a new job—or leave their current firm—even for substantial pay increases. Switching costs are equivalent to 7 to 18 percent of a worker’s annual pay. Attachment varies across firms, and cannot be explained by either differences in firm-specific amenities or switching costs." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Caldwell, Sydnee & Haegele, Ingrid & Heining, Jörg, 2025. "Firm Pay and Worker Search," IAB-Discussion Paper 202504, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:202504
    DOI: 10.48720/IAB.DP.2504
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    Keywords

    Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; Betriebstreue ; Einkommenseffekte ; Einkommenserwartung ; abhängig Beschäftigte ; Kündigungsabsicht ; Lohnunterschied ; Präferenz ; Arbeitsbedingungen ; Unternehmen ; Arbeitsplatzwechsel ; zwischenbetriebliche Mobilität ; Arbeitsuche ; 2022-2024;
    All these keywords.

    JEL classification:

    • J00 - Labor and Demographic Economics - - General - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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