How acid are lemons? Adverse selection and signalling for skilled labour market entrants


Wagner, Robert ; Zwick, Thomas


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URL: https://ub-madoc.bib.uni-mannheim.de/31391
URN: urn:nbn:de:bsz:180-madoc-313913
Document Type: Working paper
Year of publication: 2012
The title of a journal, publication series: ZEW Discussion Papers
Volume: 12-014
Place of publication: Mannheim
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: J24 , J31 , J62 , J63 , M52 , M53,
Subject headings (SWD): Deutschland , Facharbeiter , Berufseinstieg , Lohn , Adverse Selection , Arbeitsmobilität , Signalling , Schätzung
Keywords (English): entry wages , employer change , adverse selection , signalling
Abstract: This paper jointly analyses the consequences of adverse selection and signalling on entry wages of skilled employees. It uses German linked employer employee panel data (LIAB) and introduces a measure for relative productivity of skilled job applicants based on apprenticeship wages. It shows that post-apprenticeship employer changers are a negative selection from the training firms’ point of view. Negative selection leads to lower average wages of employer changersin the first skilled job in comparison to stayers. Entry wages of employer changers are specifically reduced by high occupation and training firm retention rates. Additional training firm signals are high apprenticeship wages that signal a positive selection of apprenticeship applicants, works councils and establishment size. Finally, positive individual signals such as schooling background affect the skilled entry wages of employer changers positively.




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