@TechReport{dp-349,
  author        = {Cornelissen, Thomas and Huebler, Oloaf},
  astring       = {Thomas Cornelissen and Olaf Huebler},
  title         = {Downward Wage Rigidity and Job Mobility},
  month         = {October},
  year          = {2006},
  pages         = {26},
  size          = {707},
  number        = {349},
  language      = {en},
  keywords      = {wage rigidity, wage sweep-up, quits, layoffs, promotions},
  jelclass      = {J31, J63},
  abstract      = {Using data from the German Socio-Economic Panel (GSOEP) we
                  study whether being individually affected by downward wage
                  rigidity has an effect on layoffs, quits and intra-firm
                  mobility. Within a structural empirical model we estimate
                  the individual extent of wage rigidity. This is expressed
                  by the wage sweep-up, which measures by how much individual
                  wage growth increases through the effect of downward wage
                  rigidity when compared to a counterfactual labour market
                  with flexible wage setting. We find robust negative effects
                  of wage sweep-up on quits and layoffs and some evidence for
                  a positive association of wage sweep-up and promotion
                  opportunities. This is consistent with a core-periphery
                  view of the labour force, where a core work force is
                  protected from layoffs and wage cuts and at the same time
                  enjoys good promotion opportunities. On the other side a
                  peripheral work force provides a buffer for adjustment and
                  suffers from both flexible wages, more insecure jobs and
                  less internal promotion opportunities.}
}