Wage dynamics and promotions inside and between firms

Antonio Dias da Silva
Bas van der Klaauw

Journal of Population Economics 24, 1513-1548 (2011).

We focus on the dynamic relation between wage increases, promotions and job changes. In the empirical analyses, we use the Portuguesematched employer–employee data Quadros de Pessoal. We find substantial wage returns to both promotions and job-to-job transitions. Our results are not consistent with models of full information and symmetric learning in a competitive and frictionless market. This might suggest that there is asymmetric information. An alternative explanation is that workers might search for a good match. Finally, we show that employer-reported promotions differ to a large extent from changes in hierarchical levels.

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Last updated: August 19, 2011.