Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/40158
Authors: 
Guertzgen, Nicole
Heinze, Anja
Year of Publication: 
2010
Series/Report no.: 
ZEW Discussion Papers 10-054
Abstract: 
This paper studies the importance of employer-specific determinants in escaping low earnings in Germany. To address the initial conditions problem and the endogeneity of employer retention, we model (intra-firm) low-pay transitions using a multivariate Probit model that accounts for selection into low-wage employment and non-random employer drop-out. Using data from the LIAB Linked Employer-Employee panel, our results indicate that for male workers from the service sector the probability of escaping low-pay increases with employer size. This contrasts with female workers from the service sector, who rather benefit from collective bargaining coverage and local works councils. These findings are consistent with internal labour markets being an important ingredient of male within-firm wage growth, whereas the removal of asymmetric information appears to be more relevant in explaining female workers' wage transitions.
Subjects: 
wage mobility
trivariate probit
linked employer-employee data
JEL: 
C23
J31
J51
L13
Document Type: 
Working Paper

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