Login
Guest
Search for:
Browse:
Resources:
International Journal of Manpower
ISSN: 0143-7720
Online from: 1980
Subject Area: Economics
Content: Latest Issue | 
Latest Issue RSS | Previous Issues
Options: To add Favourites and Table of Contents Alerts please take a Emerald profile
Wage differences between internal and external candidates
| Title: | Wage differences between internal and external candidates |
|---|---|
| Author(s): | Wolter Hassink, (Utrecht School of Economics, Utrecht University, Utrecht, The Netherlands), Giovanni Russo, (Utrecht School of Economics, Utrecht University, Utrecht, The Netherlands) |
| Citation: | Wolter Hassink, Giovanni Russo, (2008) "Wage differences between internal and external candidates", International Journal of Manpower, Vol. 29 Iss: 8, pp.715 - 730 |
| Keywords: | Internal labour market, Pay, Promotion, Recruitment, Risk management, The Netherlands |
| Article type: | Research paper |
| DOI: | 10.1108/01437720810919314 (Permanent URL) |
| Publisher: | Emerald Group Publishing Limited |
| Acknowledgements: | The authors are grateful to the Dutch Ministry of Social Affairs and Employment for giving us access to the AVO-data. Two anonymous referees of this journal are gratefully acknowledged for their constructive comments. |
| Abstract: | Purpose – The purpose of this paper is to investigate three hypotheses for the existence of a wage premium between incumbents and employees who are hired from other employers in the external labour market. Design/methodology/approach – The paper presents estimates of wage equations for a sample of externally hired workers and internally promoted employees. It uses an employer-employee matched data set of Dutch firms from all economic sectors (1998). It controls for various observed characteristics of the firm, the worker and the job. Findings – The estimates reject the hypothesis that firms rely more on observable characteristics for wage formation of external candidates. Nor do the estimates favor the prediction that there is a wage premium due to the option value of risky employees. Finally, employees who are recruited internally have on average a 15 percent higher wage (net of tenure) than comparable employees who are hired from other employers. Research limitations/implications – It was found that there was a limited possibility of identifying risky employees. Practical implications – Firms do not reward risky employees; the incumbents seem to be of better quality than the external hirees. Originality/value – Here the focus is on hirees who were previously employed elsewhere. Usually, a broader definition of external hiring is used. |
Fulltext Options:
Purchase
Downloadable; Printable; Owned
HTML, PDF (106kb)
To purchase this item please login or register.
Order
Fill in an Order form to request this document from your librarian
|
|
