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...

Firms are affected by the product demand. This leads to employment adjustments. In the literature we find only very few contributions investigating the issue whether internal adjustments are linked and which relationships exist with external adjustments. Are they of a complementary or...

Economic theory suggests that performance pay may serve as an effective screening device to attract productive agents. The existing evidence on the self-selection of agents is largely limited to job tasks where performance is driven by routine, well-defined procedures. This study presents...

We manipulate workers' perceived meaning of a job in a field experiment. Half of the workers are informed that their job is important, the other half are told that their job is of no relevance. Results show that workers exert more effort when meaning is high, corroborating previous findings on...

Social incentives like employee awards are widespread in the corporate sector and may be important instruments for solving agency problems. To date, we have little understanding of their effect on behavior. Unique panel data from the call center of a Fortune 500 financial services provider allow...

The paper provides evidence concerning incidence and sources of nominal wage rigidity in services and manufacturing, using a new and large employer survey on wage and price setting behaviour for Germany. We observe that wage freezes are more frequent in services than in manufacturing, whereas...

Using a large linked employer-employee data set, this paper studies the relationship between job reallocation, worker reallocation and the flexibility of wages in western German manufacturing. Using the plant-specific residual wage dispersion as a proxy for wage flexibility, we find that more...

Exploiting the unique economic situation after German unification, I investigate how exit decisions deviate between new firms in a transition and a comparatively stable market environment. Two competing exit mechanisms are considered: entrepreneurial self-selection via voluntary liquidation and...

Recent studies have documented extensive heterogeneity in firm performance within countries, and innovation has been found as an important determinant. This paper addresses the issue of innovation firm performance across countries. A growing number of national firm level studies on the...

The purpose of this paper is to evaluate whether labour mobility is likely to act as a sufficient adjustment mechanism in the face of asymmetric shocks in Euroland. To this end, we estimate the elasticity of migration with respect to changes in unemployment and income on the basis of regional...