The name is absent



Table 6: Wage Dynamics Within and Between Firmsa
Comparative Advantage

Specificationb 1

Low

Rank L

Middle

Rank M

Upper

Rank U

EXecutive
Rank EX

Rank Dummies

dL

dM

dU

dEX

Skill*Ranks

-

0.188***
(0.034)

0.469***

(0.054)

0.643***

(0.088)

Unmeasured

cL

cM

cU

cEX

1

1.041***
(0.107)

1.461***
(0.136)

1.774***

(0.220)

Measured

βL

βM

βU

βEX

1.522***

1.663***

1.772***

2.001***

Ratio
b0

(0.204)
b0
0.990***

(0.012)

(0.204)

(0.278)

(0.358 )

Testsc for Equality

Joint

M=L

U=M

EX=U

of Slopes cj

19.66 (0.00)

0.15 (0.70)

6.59 (0.01)

2.00 (0.15)

of Slopes βj

of Ratio b0 = 1

Overidentification Test

5.95 (0.11)
0.61 (0.434)
112.48 (0.00)

4.23 (0.04)

0.82 (0.36)

1.82 (0.18)

Comparative Advantage and Learning

Specificationb 2

Low

Rank L

Middle

Rank M

Upper

Rank U

EXecutive

Rank EX

Ranks

dL

dM

dU

dEX

-

0.054

0.024

-0.04

(0.079)

(0.227)

(0.19)

Skill*Ranks
Unobserved

cL

cM

cU

cEX

1

1.092***

1.449***

1.823***

(0.223)

(0.436)

(0.509)

Measured

βL

βM

βU

βEX

1.223***

1.111***

1.308***

0.812

(0.422)

(0.310)

(0.298)

(0.556)

Ratio

b0

b0

1.017***

(0.008)

Testsc for Equality

Joint

M=L

U=M

EX=U

of Slopes cj

2.80 (0.42)

0.17 (0.68)

0.70 (0.40)

1.33 (0.25)

of Slopes βj

0.62 (0.89)

0.37 (0.54)

0.17 (0.68)

0.08 (0.78)

of Ratio b0 = 1

2.00 (0.15)

Overidentification Test

57.25 (0.23)

a-Dependent variable is wage in level in thousands of marks. Also included are dummies
for the type of contract, large firm size, public sector, occupations, industries and years.
b-Estimation of Ω using the residuals from NLIV with Ω = I in a first step. Number of
observations is 11932 in the comparative advantage case and 10439 in the learning case.
The instruments for previous wage in the comparative advantage case include all the rank
interactions between t and t-1 as well skills interacted with rank. In the learning case,
current rank affiliation is instrumented using rank affiliation in t-2.

34



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