Why Pay Seniority Wages?


Zwick, Thomas


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URL: http://ub-madoc.bib.uni-mannheim.de/2296
URN: urn:nbn:de:bsz:180-madoc-22968
Document Type: Working paper
Year of publication: 2009
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J14 J21 J31 ,
Subject headings (SWD): Deutschland , Lohn , Betriebszugehörigkeit , Unternehmen , Arbeitsbeziehungen
Keywords (English): Seniority Wages , Establishment Characteristics , Linked Employer-Employee Data
Abstract: This paper characterises establishments that pay higher seniority wages than their competitors. It tests whether seniority wages are paid on the basis of agency, human capital or efficiency wage considerations. A representative linked employeremployee panel and an innovative two-step estimation strategy are used to first calculate individual seniority wages taking into account that match quality biases tenure effects on wages. Then individual seniority wages are aggregated to the establishment level. Finally, the seniority wage indicator is explained by establishment characteristics. This contribution shows that large, profitable and establishments with a highly qualified workforce pay high seniority wages. Also collective bargaining coverage and works councils have a positive impact and the share of foreigners, training intensity and initial wage levels have a negative correlation with seniority wages. The results support an agency based motivation for seniority wages.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Zwick, Thomas (2009) Why Pay Seniority Wages? Open Access [Working paper]
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