How acid are lemons? Adverse selection and signalling for skilled labour market entrants

Robert Wagner and Thomas Zwick

No 12-014, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: 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 that post-apprenticeship employer changers are a negative selection from the training firms' point of view. Negative selection leads to lower average wages of employer changersin the first skilled job in comparison to stayers. Entry wages of employer changers are specifically reduced by high occupation and training firm retention rates. Additional training firm signals are high apprenticeship wages that signal a positive selection of apprenticeship applicants, works councils and establishment size. Finally, positive individual signals such as schooling background affect the skilled entry wages of employer changers positively.

Keywords: entry wages; employer change; adverse selection; signalling (search for similar items in EconPapers)
JEL-codes: J24 J31 J62 J63 M52 M53 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-bec, nep-cta, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Working Paper: How Acid are Lemons? Adverse Selection and Signalling for Skilled Labour Market Entrants (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:12014

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