Micro-econometrics

The determinants of promotions and firm separations

by Priscila Ferreira

This paper identifies and compares the determinants of within- and between-firm job mobility in Portugal. Estimates... more This paper identifies and compares the determinants of within- and between-firm job mobility in Portugal. Estimates are based on models that distinguish promotions by whether or not they involve a change in the tasks performed, and separations by the time workers take to enter a new firm. Both worker and firm observed characteristics emerge as important factors in the analysis. Firm unobserved heterogeneity is relevant, evidence suggests that firms vary more in their unobserved propensity to promote than in the case of separations. Overall, this study highlights two main issues; the role of firms in the process of job mobility, and the importance of distinguishing not only between types of separations from firms, but also between types of promotions within firms.

Returns to job mobility: the role of observed and unobserved factors

by Priscila Ferreira

We investigate the returns to promotions and separations from firms using Portuguese linked employer-employee data.... more We investigate the returns to promotions and separations from firms using Portuguese linked employer-employee data. More than 90% of the total variation in wages can be ex- plained by observed and unobserved characteristics of workers and firms. Taken together, worker and firm unobserved effects explain more than half of the variation of wages for all types of job mobility. Our results suggest that promoted workers are high wage workers in high wage firms. Movers are inherently lower wage workers, in lower wage firms. However, on average, workers that find a new job within one year enter firms that pay higher wages. This is not true for workers that take more than a year to find a new job.

The sources of interindustry wage differentials

by Priscila Ferreira

We analyse the nature of interindustry wage differentials using Portuguese data. Estimates from models controlling for... more We analyse the nature of interindustry wage differentials using Portuguese data. Estimates from models controlling for observed worker and firm characteristics reveal significant and persistent raw interindustry differentials, which questions the competitive model of the labour market. However, estimates controlling for unobserved worker heterogeneity suggest that the raw differentials are due to the concentration of high wage workers in certain industries and not to genuine differences in compensation across industries. However, a complete decomposition shows that (i) firm effects on average explain 70% of the industry wage premia, and (ii) genuine and sizeable interindustry wage differentials exist. These differentials are shown to increase the time to separation from firms, and are therefore compatible with the competitive model.

Measuring match quality using subjective data

by Priscila Ferreira

Co-authored with Mark Taylor, ISER, University of Essex; Published in Economics Letters

We examine whether data routinely collected in household surveys and surveys of workers can be used to construct a... more We examine whether data routinely collected in household surveys and surveys of workers can be used to construct a measure of underlying match quality between worker and firm which helps test matching models and predict subsequent labour market outcomes of workers. We use subjective data from employees both on reported levels of job satisfaction with various aspects of the current job and on whether they would like a new job with a new employer to construct a measure of underlying match quality. We then use this to test several implications of matching models relating to wage-tenure profiles, wages, and separations.