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Wage Mobility Through Job Mobility

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Abstract

The purpose of this paper is to study the relationship between job mobility and wage mobility. One of the main points of this paper is that job mobility is not necessarily bad. Job mobility might be the quickest way in which workers can advance in their careers and move up in the wage structure. Specifically I am going to distinguish between voluntary and involuntary job changes in both the modeling of job mobility behavior and the determination of the wage gains associated with job changing activities. Using the National Longitudinal Survey of Youth data, I find that workers voluntarily leave their jobs whenever they find themselves being paid below the customary wage rate. In particular, a worker that earns 30% less than the average wage for a worker with his characteristics and labor market experience is more than one and a half times as likely to initiate a separation than a worker just earning the average wage rate. Conversely, a worker earning 30% more than the average wage for a worker with his qualifications and labor market experience faces almost a 50% higher risk of being laid-off. This result is consistent across models. Workers' post-separation wage gains also depend on this distinction. Voluntary job changes lead, on average, to gains on the order of 7%, while layoffs imply losses of 5%. That is, voluntary separations, on average, allow workers to improve their relative position in the wage structure. Laid-off workers, however, tend

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  • Marcela C. Perticara(Georgetown University/Ilades), 2004. "Wage Mobility Through Job Mobility," Working Papers gueconwpa~04-04-14, Georgetown University, Department of Economics.
    • Handle: RePEc:geo:guwopa:gueconwpa~04-04-14
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    References listed on IDEAS

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    1. Ann P. Bartel & George J. Borjas, 1981. "Wage Growth and Job Turnover: An Empirical Analysis," NBER Chapters, in: Studies in Labor Markets, pages 65-90, National Bureau of Economic Research, Inc.
    2. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    3. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-261, April.
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    6. Rosen, Sherwin, 2007. "Studies in Labor Markets," National Bureau of Economic Research Books, University of Chicago Press, number 9780226726304, September.
    7. Audrey Light & Kathleen McGarry, 1998. "Job Change Patterns And The Wages Of Young Men," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 276-286, May.
    8. Jacob Mincer, 1986. "Wage Changes in Job Changes," NBER Working Papers 1907, National Bureau of Economic Research, Inc.
    9. Keith, Kristen & McWilliams, Abagail, 1997. "Job Mobility and Gender-Based Wage Growth Differentials," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 320-333, April.
    10. Bernhardt, Annette & Morris, Martina & Handcock, Mark S & Scott, Marc A, 1999. "Trends in Job Instability and Wages for Young Adult Men," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 65-90, October.
    11. Loprest, Pamela J, 1992. "Gender Differences in Wage Growth and Job Mobility," American Economic Review, American Economic Association, vol. 82(2), pages 526-532, May.
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    Cited by:

    1. Gielen, A. C. & van Ours, J.C., 2006. "Why do Worker-Firm Matches Dissolve?," Discussion Paper 2006-57, Tilburg University, Center for Economic Research.
    2. May Gadallah, 2011. "Factors of Career Mobility in Egypt by Gender," Working Papers 623, Economic Research Forum, revised 09 Jan 2011.
    3. A. Davia, Maria, 2005. "Job mobility and wage mobility at the beginning of the working career: a comparative view across Europe," ISER Working Paper Series 2005-03, Institute for Social and Economic Research.
    4. Panigo, Demian & Naticchioni, Paolo, 2004. "Employment protection, job-tenure and short term mobility wage gains," CEPREMAP Working Papers (Couverture Orange) 0402, CEPREMAP.
    5. Uta Schönberg, 2007. "Wage Growth Due to Human Capital Accumulation and Job Search: A Comparison between the United States and Germany," ILR Review, Cornell University, ILR School, vol. 60(4), pages 562-586, July.
    6. Gielen, A. C. & van Ours, J.C., 2006. "Why do Worker-Firm Matches Dissolve?," Discussion Paper 2006-57, Tilburg University, Center for Economic Research.

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    More about this item

    Keywords

    Mobility; Job Turnover; Wage Differentials; Duration Analysis;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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