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Wage Growth and Job Turnover: An Empirical Analysis

In: Studies in Labor Markets

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  • Ann P. Bartel
  • George J. Borjas

Abstract

This paper demonstrates that labor turnover is a significant factor in understanding wage growth since it affects both wage growth across jobs and wage growth within the job. Our analysis shows that young men who quit experience significant wage gains compared to stayers and compared to their own wage growth prior to the job change. Among older men, a quit increases wage growth only if the individual said he changed jobs because he found a better job. Yet in both age groups, individuals who expect to remain on the current job experience steeper wage growth per time period on that job. Thus labor turnover has offsetting effects on wage growth, leading to wage gains across jobs but flatter growth in shorter jobs. Our empirical analysis shows however that total life-cycle wage growth is positively related to current tenure. While early mobility may pay, individuals who are still changing jobs later in life experience lower overall wage growth.

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This chapter was published in:

  • Sherwin Rosen, 1981. "Studies in Labor Markets," NBER Books, National Bureau of Economic Research, Inc, number rose81-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 8908.

    Handle: RePEc:nbr:nberch:8908

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    References

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    1. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 75, pages 352.
    2. Heckman, James J, 1976. "A Life-Cycle Model of Earnings, Learning, and Consumption," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 84(4), pages S11-44, August.
    3. Lazear, Edward P, 1976. "Age, Experience, and Wage Growth," American Economic Review, American Economic Association, American Economic Association, vol. 66(4), pages 548-58, September.
    4. Jacob Mincer & Boyan Jovanovic, 1981. "Labor Mobility and Wages," NBER Chapters, in: Studies in Labor Markets, pages 21-64 National Bureau of Economic Research, Inc.
    5. Ann P. Bartel, 1980. "The Economics of Migration: An Empirical Analysis with Special Referenceto the Role of Job Mobility," NBER Working Papers 0198, National Bureau of Economic Research, Inc.
    6. Sahota, Gian Singh, 1978. "Theories of Personal Income Distribution: A Survey," Journal of Economic Literature, American Economic Association, vol. 16(1), pages 1-55, March.
    7. Ann P. Bartel & George J. Borjas, 1977. "Middle-Age Job Mobility: Its Determinants and Consequences," NBER Working Papers 0161, National Bureau of Economic Research, Inc.
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