We measure the contribution of match quality to the wage growth experienced by job movers. We reject the exogenous mobility assumption needed to estimate a standard fixed-effects wage regression in the Danish matched employer-employee data. We exploit the sub-sample of workers hired from...

We measure the contribution of match quality to the wage growth experienced by job movers. We reject the exogenous mobility assumption needed to estimate a standard fixed-effects wage regression in the Danish matched employer-employee data. We exploit the sub-sample of workers hired from...

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...

Offering higher wages may enable firms to attract more applicants and screen them more carefully. If firms compete in this way in the labor market, "selection wages" emerge. This note illustrates this wage-setting mechanism. Selection wages may engender unconventional results, such as a pre-tax...

Models with high dimensional sets of fixed effects are frequently used to examine, among others, linked employer-employee data, student outcomes and migration. Estimating these models is computationally difficult, so simplifying assumptions that are likely to cause bias are often invoked to make...

This study examines returns to tenure using Mincer wage regressions and longitudinal employer-employee payroll data from Great Britain. We find a pervasive downward bias in estimates of returns to tenure that rely solely on match fixed effects to control for unobserved factors influencing wages...

Models with high dimensional sets of fixed effects are frequently used to examine, among others, linked employer-employee data, student outcomes and migration. Estimating these models is computationally difficult, so simplifying assumptions that are likely to cause bias are often invoked to make...

It is well known that, unless worker-firm match quality is controlled for, returns to firm tenure (RTT) estimated directly via reduced form wage (Mincer) equations will be biased. In this paper we argue that even if match quality is properly controlled for there is a further pervasive source of...

Models with high dimensional sets of fixed effects are frequently used to examine, among others, linked employer-employee data, student outcomes and migration. Estimating these models is computationally difficult, so simplifying assumptions that cause bias are often invoked to make computation...

Little is known about how workers update expectations about job search and earnings when exposed to labor market news. To identify the impact of news on expectations, I exploit Foxconn’s unexpected announcement to build a manufacturing plant in Racine County. Exposure to positive news leads to...