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Job Mobility and Earnings over the Life Cycle

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  • George J. Borjas

Abstract

Previous studies have shown that in the short run quits generally lead to wage increases on the next job and layoffs to no increase or to a wage cut. The author of this study argues, however, that the prospect of a job change for any reason creates a disincentive for a worker to invest in training that is specific to the current job, and therefore those who change jobs frequently may earn less over their life cycle than those who, other things equal, seldom change jobs. An analysis of data from the National Longitudinal Survey of Mature Men supports that expectation, showing that for white males job separations usually lead to wage gains in the short run but nonmobile workers tend to achieve significantly higher wages over the long run.

Suggested Citation

  • George J. Borjas, 1981. "Job Mobility and Earnings over the Life Cycle," ILR Review, Cornell University, ILR School, vol. 34(3), pages 365-376, April.
    • Handle: RePEc:sae:ilrrev:v:34:y:1981:i:3:p:365-376
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    References listed on IDEAS

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    Cited by:

    1. Henneberger, Fred & Sousa-Poza, Alfonso, 2002. "Beweggründe und Determinanten zwischenbetrieblicher Mobilität: Die Schweiz in einer internationalen Perspektive (Motives and determinants of job-to-job mobility : Switzerland in an international persp," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 205-231.
    2. Javier Gómez Pineda, 2004. "A Framework for Macroeconomic Stability in Emerging Market Economies," Borradores de Economia 320, Banco de la Republica de Colombia.
    3. van Huizen, Thomas & Alessie, Rob, 2019. "Risk aversion and job mobility," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 91-106.
    4. Emily C. Blank, 1988. "Layoffs and Wage Growth of Male Household Heads," Eastern Economic Journal, Eastern Economic Association, vol. 14(3), pages 239-250, Jul-Sep.
    5. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    6. Aviad Tur-Sinai, 2020. "The effect of terror and economic sector in early career years on future career path," Empirical Economics, Springer, vol. 59(5), pages 2153-2184, November.
    7. Alain Cohn & Michel André Maréchal & Frédéric Schneider & Roberto A Weber, 2021. "Frequent Job Changes can Signal Poor Work Attitude and Reduce Employability," Journal of the European Economic Association, European Economic Association, vol. 19(1), pages 475-508.
    8. Iris Kesternich & Bettina Siflinger & James P. Smith & Franziska Valder, 2022. "Relationship Stability: Evidence from Labor and Marriage Markets," CEBI working paper series 22-20, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    9. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
    10. Harvey S. James & Derek M. Johnson, 2000. "Just-cause provisions, severance pay, and the efficiency wage hypothesis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 83-88.
    11. Emily Blank, 1989. "Changes in the stock of on-the-job training, race, and wage growth," The Review of Black Political Economy, Springer;National Economic Association, vol. 17(4), pages 45-57, March.
    12. Adrian Chadi & Clemens Hetschko, 2021. "How Job Changes Affect People's Lives — Evidence from Subjective Well‐Being Data," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 279-306, June.
    13. Bäker, Agnes, 2015. "Non-tenured post-doctoral researchers’ job mobility and research output: An analysis of the role of research discipline, department size, and coauthors," Research Policy, Elsevier, vol. 44(3), pages 634-650.
    14. Parrado, E. & Wolff, E., 1999. "Occupational and Industry Mobility in the United States, 1969-1992," Working Papers 99-20, C.V. Starr Center for Applied Economics, New York University.
    15. Parrado, Eric & Caner, Asena & Wolff, Edward N., 2007. "Occupational and industrial mobility in the United States," Labour Economics, Elsevier, vol. 14(3), pages 435-455, June.
    16. van Huizen, Thomas & Alessie, Rob, 2015. "Time preferences and career investments," Labour Economics, Elsevier, vol. 35(C), pages 77-92.
    17. Michael Carlos Best & Henrik Jacobsen Jacobsen, 2013. "Optimal Income Taxation with Career Effects of Work Effort," Working Papers 2013-9, Princeton University. Economics Department..
    18. Alan Manning & Farzad Saidi, 2010. "Understanding the Gender Pay Gap: What's Competition Got to Do with it?," ILR Review, Cornell University, ILR School, vol. 63(4), pages 681-698, July.
    19. Eric Parrado & Asena Caner & Edward N. Wolff, 2005. "Occupational and Industrial Mobility in the United States 1969–93," Economics Working Paper Archive wp_416, Levy Economics Institute.
    20. Eliza Forsythe, 2019. "Careers within Firms: Occupational Mobility Over the Lifecycle," LABOUR, CEIS, vol. 33(3), pages 241-277, September.
    21. Nuno M. O. Romão & Vitor M. A. Escaria, 2004. "Wage mobility, Job mobility and Spatial mobility in the Portuguese economy," ERSA conference papers ersa04p584, European Regional Science Association.
    22. Alan L. Gustman & Thomas L. Steinmeier, 1982. "Partial Retirement and Wage Profiles of Older Workers," NBER Working Papers 1000, National Bureau of Economic Research, Inc.
    23. Henneberger, Fred & Sousa-Poza, Alfonso, 2002. "Beweggründe und Determinanten zwischenbetrieblicher Mobilität: Die Schweiz in einer internationalen Perspektive (Motives and determinants of job-to-job mobility : Switzerland in an international persp," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(2), pages 205-231.

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