EconPapers    
Economics at your fingertips  
 

The determination of wages of newly hired employees: Survey evidence on internal versus external factors

Kamil Galuscak, Mary Keeney (), Daphne Nicolitsas, Frank Smets, Paweł Strzelecki and Matija Vodopivec

Labour Economics, 2012, vol. 19, issue 5, 802-812

Abstract: This paper reports findings on the relative importance of internal versus external factors in the setting of wages of newly hired workers. The evidence, from a rich firm-level survey on wage and price-setting procedures in 15 European Union countries, suggests that external labour market conditions are less important than internal pay structures in determining hiring pay, with internal pay structures binding even more often when there is labour market slack. When explaining their choice firms allude to fairness considerations and the need to prevent a potential negative impact on effort. Cross-country differences are found to depend on institutional factors: countries in which collective agreements are more prevalent and collective agreement coverage is higher report more often internal pay structures as the main determinant of hiring pay. Within-country differences are found to depend on firm and workforce characteristics: there is a strong association between the use of external factors in hiring pay, on the one hand, and skills (positive) and tenure (negative) on the other.

Keywords: Wage rigidity; Newly hired workers; Internal pay structure; Employee turnover; Survey data (search for similar items in EconPapers)
JEL-codes: J41 J51 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927537112000280
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The determination of wages of newly hired employees: survey evidence on internal versus external factors (2011) Downloads
Working Paper: The Determination of Wages of Newly Hired Employees: Survey Evidence on Internal versus External Factors (2010) Downloads
Working Paper: The determination of wages of newly hired employees: survey evidence on internal versus external factors (2010) Downloads
Working Paper: The Determination of Wages of Newly Hired Employees: Survey Evidence on Internal versus External Factors (2009) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:19:y:2012:i:5:p:802-812

DOI: 10.1016/j.labeco.2012.03.009

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-31
Handle: RePEc:eee:labeco:v:19:y:2012:i:5:p:802-812