Wage Mobility Through Job Mobility
AbstractThe 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. I also show that the informational content on this wage difference seems to decline as the worker acquires more experience (and presumably he learns more about his true productivity) or as the employer information sources increase. All these results are consistent across models. Workersâ€™ 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 to perform poorly after experiencing a separation. Fifty-percent of the laid-off workers experience wage losses, while 70% of the voluntary job changes end in wage gains. Although quitters have positive wage gains on average, a fairly high amount of quits end up with wage losses. Quitting seems to be a risky, but very rewarding activity. Moreover, while at early stages of the career, workers experience large wage gains from quitting, these gains seem to disappear as their careers extends. Laid-off losses increase as the career extends, particularly for high-skilled workers
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 204.
Date of creation: 11 Aug 2004
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Job Mobility; Income mobility; NLSY;
Other versions of this item:
- Marcela Perticara, . "Wage Mobility Through Job Mobility," ILADES-Georgetown University Working Papers inv141, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
- Marcela C. Perticara(Georgetown University/Ilades), 2004. "Wage Mobility Through Job Mobility," Working Papers gueconwpa~04-04-14, Georgetown University, Department of Economics.
- 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
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-30 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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