Central banks need to be concerned about wages since they are a major driver of inflation. Rising wages are needed to signal directions for market adjustments to ensure growth. Wage growth is driven by relative scarcity, labor productivity and expectations about inflation and future growth....

The paper investigates the relative importance of job mobility for wages in comparison with the human capital framework and the industry approach. Using German panel data, changes of workplaces within the firm as well as between the firms are carefully separated from occupational changes....