Details
| Original language | English |
|---|---|
| Pages (from-to) | 205-230 |
| Number of pages | 26 |
| Journal | Empirical economics |
| Volume | 34 |
| Issue number | 2 |
| Early online date | 26 Feb 2007 |
| Publication status | Published - Mar 2008 |
Abstract
Using data from the German Socio-Economic Panel (GSOEP) we study whether being individually affected by downward wage rigidity has an effect on layoffs, quits and intra-firm mobility. Within a structural empirical model we estimate the individual extent of wage rigidity. This is expressed by the wage sweep-up, which measures by how much individual wage growth increases through the effect of downward wage rigidity when compared to a counterfactual labour market with flexible wage setting. We find robust negative effects of wage sweep-up on quits and layoffs and some evidence for a positive association of wage sweep-up and promotion opportunities. This is consistent with a core-periphery view of the labour force, where a core work force is protected from layoffs and wage cuts and at the same time enjoys good promotion opportunities. On the other side a peripheral work force provides a buffer for adjustment and suffers from both flexible wages, more insecure jobs and less internal promotion opportunities.
Keywords
- Layoffs, Promotions, Quits, Wage rigidity, Wage sweep-up
ASJC Scopus subject areas
- Mathematics(all)
- Statistics and Probability
- Mathematics(all)
- Mathematics (miscellaneous)
- Social Sciences(all)
- Social Sciences (miscellaneous)
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Empirical economics, Vol. 34, No. 2, 03.2008, p. 205-230.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Downward wage rigidity and job mobility
AU - Cornelißen, Thomas
AU - Hübler, Olaf
N1 - Acknowledgments: We would like to thank Knut Gerlach, Steinar Holden, Friedhelm Pfeiffer, the participants of the final conference of the international wage flexibility project as well as three anonymous referees for helpful comments. Financial support by the DFG (project no. HU 368/4) is gratefully acknowledged.
PY - 2008/3
Y1 - 2008/3
N2 - Using data from the German Socio-Economic Panel (GSOEP) we study whether being individually affected by downward wage rigidity has an effect on layoffs, quits and intra-firm mobility. Within a structural empirical model we estimate the individual extent of wage rigidity. This is expressed by the wage sweep-up, which measures by how much individual wage growth increases through the effect of downward wage rigidity when compared to a counterfactual labour market with flexible wage setting. We find robust negative effects of wage sweep-up on quits and layoffs and some evidence for a positive association of wage sweep-up and promotion opportunities. This is consistent with a core-periphery view of the labour force, where a core work force is protected from layoffs and wage cuts and at the same time enjoys good promotion opportunities. On the other side a peripheral work force provides a buffer for adjustment and suffers from both flexible wages, more insecure jobs and less internal promotion opportunities.
AB - Using data from the German Socio-Economic Panel (GSOEP) we study whether being individually affected by downward wage rigidity has an effect on layoffs, quits and intra-firm mobility. Within a structural empirical model we estimate the individual extent of wage rigidity. This is expressed by the wage sweep-up, which measures by how much individual wage growth increases through the effect of downward wage rigidity when compared to a counterfactual labour market with flexible wage setting. We find robust negative effects of wage sweep-up on quits and layoffs and some evidence for a positive association of wage sweep-up and promotion opportunities. This is consistent with a core-periphery view of the labour force, where a core work force is protected from layoffs and wage cuts and at the same time enjoys good promotion opportunities. On the other side a peripheral work force provides a buffer for adjustment and suffers from both flexible wages, more insecure jobs and less internal promotion opportunities.
KW - Layoffs
KW - Promotions
KW - Quits
KW - Wage rigidity
KW - Wage sweep-up
UR - http://www.scopus.com/inward/record.url?scp=41149124378&partnerID=8YFLogxK
U2 - 10.1007/s00181-007-0118-5
DO - 10.1007/s00181-007-0118-5
M3 - Article
AN - SCOPUS:41149124378
VL - 34
SP - 205
EP - 230
JO - Empirical economics
JF - Empirical economics
SN - 0377-7332
IS - 2
ER -