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In Chapter 2 we look at how labor market conditions at different points during the tenure of individuals with firms are correlated with current earnings. Using data on individuals from the German Socioeconomic Panel for the period 1985 to 1994, we find that both the contemporaneous unemployment rate and prior values of the unemployment rate are significantly correlated with current earnings, contrary to results for the American labor market. Whereas local unemployment rates determine levels of earnings, national rates influence contemporaneous variations in earnings. We interpret this result as evidence that German unions do in fact bargain over wages and employment, but that models of individualistic contracts, such as the implicit contract model, may explain some of the observed wage drift and longer term wage movements reasonably well. Furthermore, we explore the heterogeneity of contracts over a variety of worker and job characteristics. In particular, we find evidence that contracts differ across firm we and workers type.

Formal on-the-job training and its impact on the sectoral mobility of workers is the subject of Chapters 3 and 4. In Chapter 3, using data from the National Longitudinal Survey of Youth (NLSY), we re-examine the effect of formal on-the-job training on mobility patterns of young American workers. Confirming previous studies, we find a positive and statistically significant impact of formal on-the-job training on tenure with the employer providing the training. However, expected duration net of the time spent in the training program is generally not significantly increased. We proceed to document and analyze intra-sectoral and cross-sectoral mobility patterns in order to infer whether training provides firm-specific, industry-specific, or general human capital. The econometric analysis rejects a sequential model of job separation in favor of a competing risks specification. We find significant evidence for the industry-specificity of training. The probability of sectoral mobility upon job separation decreases with training received in the current industry, whether with the last employer or previous employers, and employment attachment increases with on-the-job training.

Finally, Chapter 4 studies mobility patterns of German workers in fight of a model of sector-specific human capital. Furthermore, I employ and describe little-used data on continuous on-the-job training occurring after apprenticeships. Results are presented describing the incidence and duration of continuous training. Continuous training is quite common, despite the high incidence of apprenticeships which precedes this part of a worker's career. Most previous studies have only distinguished between firm-specific and general human capital, generally concluding that training was general. Inconsistent with those conclusions, I show that German men are more likely to find a job within the same sector if they have received continuous training in that sector. These results are similar to results obtained for young U.S. workers, and suggest that sector-specific capital is an important feature of very different labor markets. Furthermore, the results suggest that the observed effect of training on mobility is sensitive to the state of the business cycle. (Abstract shortened by UMI.)