The PL equation includes individual-, firm-, and industry-specific control variables: (i) B it is a set of worker including an age categories, marital status, job tenure and tenure squared, region of residence, union membership, and earnings in period year t−1; (ii) I j is industry-specific dummy variables; and (iii) D t is a set of year-specific dummy variables.
The covariate vector x it consists of variables such as age, dummy variables for being foreign, having completed an apprenticeship, obtained a university degree, working part-time, having a temporary contract, and being a white-collar employee, as well as tenure and tenure squared.
Firm and individual-level controls (variables C1 C6) include age, age-squared, experience, experience-squared, tenure and dummy variables for temporary contract, public sector or NGO, firm size and field-of-study (major).
Worker controls comprise potential experience and tenure (both linearly and squared), dummy variables for joining the plant before 1975 (i.e. censored job tenure), five levels of education, non-German nationality, year of observation, and three-digit occupation.
Interactions of gender with age, its square, job tenure, civil status, and children are also included.
Interactions of female with age, its square, job tenure, married, and parent are also included.
a Adjusted for age, age squared, gender, social class, marital status, carer status, employment status, and housing tenure.
a The individual-level variables were age, age squared, gender, social class, marital status, carer status, employment status, and housing tenure.
We control for a number of firm and personal characteristics (small firm, gender, age, age squared, years of education, marital status, children at home age below or equal 5, tenure, year dummies).
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