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Employment protection, job-tenure and short term mobility wage gains

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  • Panigo, Demian
  • Naticchioni, Paolo

Abstract

This paper investigates theoretical and empirical links between jobtenure and short-term mobility wage gains. Standard theoretical approaches examining this subject (search theory, job-matching and on-the-job training models) predict a negative correlation between these variables. Furthermore, this result has been confirmed in different applied researches for US. However, European labour market institutions appear to be quite different from US ones, especially for employment protection and turnover costs. Taking this feature into account we develop a theoretical model, evaluated through analytical and simulation procedures, where optimal switching conditions determine a positive correlation between jobtenure and short-term mobility wage gains. The main proposition derived from our model is confirmed for the Italian case. Using a panel database and different econometric specifications -in order to control for individual observable and non-observable effects, firm attributes and endogeneity bias- we find out that short-term mobility wage gains are non linear and positively correlated with job-tenure.

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Bibliographic Info

Paper provided by CEPREMAP in its series CEPREMAP Working Papers (Couverture Orange) with number 0402.

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Length: 48 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:cpm:cepmap:0402

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Cited by:
  1. Giordano Mion & Paolo Naticchioni, 2009. "The spatial sorting and matching of skills and firms," LSE Research Online Documents on Economics 42670, London School of Economics and Political Science, LSE Library.
  2. Bernhard Boockmann & Susanne Steffes, 2010. "Workers, Firms, or Institutions: What Determines Job Duration for Male Employees in Germany?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 64(1), pages 109-127, October.

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