Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51881 
Year of Publication: 
2011
Series/Report no.: 
IZA Discussion Papers No. 5538
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We investigate wage differences between newly hired and incumbent employees. We show in a formal model that when employees care for wages as well as match-specific utility, incumbents earn less than new recruits if and only if firm-specific human capital is not too important. The existence and structure of these wage premia is then investigated empirically using detailed personnel data from a large number of banks. We find that, on average, new hires earn more than comparable incumbent colleagues on the same job. But the size of the wage premia varies between jobs and indeed strongly depends on a measure of human capital specificity.
Subjects: 
wages
job mobility
wage premia
human capital
new hires
JEL: 
J31
J44
J62
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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