Match Quality, Turnover and Wage Growth PDF Download

Author: John Bishop
Publisher:
ISBN:
Category : Labor turnover
Languages : en
Pages : 70

View

Book Description

Author: Emre Ekinci
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

View

Book Description
This paper develops a signaling model to investigate the effects of discretionary bonuses and wage increases on turnover. When the worker's output is not contractible and the firm privately learns about the match quality between the firm and the worker, bonus payments and wage increases can convey the firm's private information to the worker. If the firm credibly communicates favorable information about the match quality to a worker, the worker develops higher expectations concerning her career outcomes at the firm (such as future wage increases and promotions) and, consequently, becomes less likely to separate. The analysis demonstrates that although a wage increase and a bonus reflect the same information regarding the match quality, each serves a distinctly different role in terms of the worker's turnover decision. Specifically, the firm pays bonuses to signal a good match while using wages to respond to competing offers the worker receives. The model yields testable predictions that concern how bonuses are related to wage increases and promotions and how bonuses and wage increases are related to turnover. The empirical analysis based on the data constructed from the personnel records of a large firm in the financial services industry provides support for the model's implications.

Author: Monica Galizzi
Publisher: FrancoAngeli
ISBN: 9788846469427
Category : Business & Economics
Languages : en
Pages : 132

View

Book Description

Author: Peter Fredriksson
Publisher:
ISBN:
Category :
Languages : en
Pages : 54

View

Book Description
We examine the direct impact of idiosyncratic match quality on entry wages and job mobility using unique data on worker talents matched to job-indicators and individual wages. Tenured workers are clustered in jobs with high job-specific returns to their types of talents. We therefore measure mismatch by how well the types of talents of recent hires correspond to the talents of tenured workers performing the same jobs. A stylized model shows that match quality has a smaller impact on entry wages but a larger impact on separations and future wage growth if matches are formed under limited information. Empirically, we find such patterns for inexperienced workers and workers who were hired from non-employment, which are also groups where mismatch is more pronounced on average. Most learning about job-specific mismatch happens within a year. Experienced job-to-job movers appear to match under much less uncertainty. They are better matched on entry and mismatch have a smaller effect on their initial separation rates and later wage growth. Instead, match quality is priced into their starting wages.

Author: Jacob Mincer
Publisher:
ISBN:
Category : Labor turnover
Languages : en
Pages : 72

View

Book Description
Using explicit information on timing and duration of job training in panels of PSID men, I find negative effects of training on turnover and positive effects on wage growth in the firm and over longer periods (1968 to 1983). Wages of trainees grow 4-6% faster per year over periods of training compared to other workers or periods. Wage trajectories in the firm and across firms over longer periods are steeper for workers who engage in more training. These results are explainable by a positive correlation between general and firm-specific components of training. So is the apparent paradox that frequent movers' wages grow less in the long run than those of less frequent movers (stayers), despite wage gains in moving. Mobility wage gains are reduced by worker investment in training in the new firm. These mobility (search and matching) gains appear to contribute to job attachment in the presence of such investments.

Author: Taye Mengistae
Publisher: World Bank Publications
ISBN:
Category : Crecimiento economico
Languages : en
Pages : 49

View

Book Description
Abstract: April 1999 - Estimated age and job seniority profiles of wages and marginal productivity in Ethiopia suggest that both skill formation and job matching significantly affect growth of wages and productivity over time. However, job matching is by far the more important of the two sources of growth in wages and productivity. Mengistae analyzes production and labor market data for a random selection of small to medium-size firms in Ethiopia to answer two questions: Does a worker's marginal productivity increase with time in the labor market or with job seniority, as must be the case if on-the-job skill formation or job matching has anything to do with the dynamics of wages observed in the data? Assuming that marginal productivity grows with experience or seniority, is skill formation more or less important than job matching as a source of growth in productivity? The main feature of Mengistae's analysis is the joint regression of the log of the average product of hours in a firm and the log of average hourly earnings of a firm's employees on the shares of experience-seniority cells of workers in total annual hours in the firm. Marginal productivity falls as experience in the labor market passes the 15-year mark, but the expected marginal product of a mobile worker with 16 or more years of experience is still nearly 80 percent higher than that of the base group. The between-jobs growth of hourly wages with potential experience is also large, but not as large as growth in marginal productivity for workers with less than 15 years of experience. Mengistae concludes that job matching is far more important than skill formation as a source of growth in productivity. Net mobility gains account for at least twice the share of the return to skill formation in the observed between-jobs growth of wages with market experience. The rate of return to skills formation is higher in the United States than in Ethiopia. The relative return to skills formation is probably lower in Ethiopia partly because the flow of information about the labor market is more restricted there. This paper-a product of the Development Research Group-is part of a larger effort in the group to identify firm-level sources of growth in productivity. The author may be contacted at [email protected].

Author: Joachim Prinz
Publisher: Rainer Hampp Verlag
ISBN: 9783879888511
Category : Wages
Languages : en
Pages : 244

View

Book Description
One of the most stylized facts in labor economics is the finding that wages tend to rise with job duration but what is the role of productivity between this relation? Intuitively, it seems rather unspectacular that experienced workers' earnings are higher than otherwise comparable junior workers', but economic literature offers three competing theories explaining this phenomenon. A unique database from a single professional sports industry, covering the past decade of player performance and wages in the National Basketball Association (NBA) is used to test the superiority of one model over others in explaining players' upwards sloping age-earnings profiles. The empirical results show little evidence of the notion that player wages are solely determined on the basis of their productivity. Findings are rather in accordance with shirking and matching ideas: Returns to tenure are found to be significant but it's magnitude is reduced when the spurious bias - stemming from OLS - is controlled for. The fact that tenure remains considerably large - unaffected of productivity - but is simultaneously mitigated due to job match specific effects, is in harmony with incentive and matching arguments.Joachim Prinz, born 1971, studied economics at the University of Trier, Copenhagen Business School and American University, Washington D.C. From 1999-2001 he was a scientific co-worker at the University of Greifswald, Department of Economics. Since 2001 University of Witten/ Herdecke.

Author: Ann P. Bartel
Publisher:
ISBN:
Category : Labor turnover
Languages : en
Pages : 54

View

Book Description
This paper demonstrates that labor turnover is a significant factor in understanding wage growth since it affects both wage growth across jobs and wage growth within the job. Our analysis shows that young men who quit experience significant wage gains compared to stayers and compared to their own wage growth prior to the job change. Among older men, a quit increases wage growth only if the individual said he changed jobs because he found a better job. Yet in both age groups, individuals who expect to remain on the current job experience steeper wage growth per time period on that job. Thus labor turnover has offsetting effects on wage growth, leading to wage gains across jobs but flatter growth in shorter jobs. Our empirical analysis shows however that total life-cycle wage growth is positively related to current tenure. While early mobility may pay, individuals who are still changing jobs later in life experience lower overall wage growth.

Author: United States. Department of Labor. Commission on Workforce Quality and Labor Market Efficiency
Publisher:
ISBN:
Category : Education and state
Languages : en
Pages : 1216

View

Book Description

Author: Douglas Staiger
Publisher:
ISBN:
Category : Employment (Economic theory)
Languages : en
Pages : 144

View

Book Description