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Are Individuals Optimizing Their Wage Path? An Analysis Using Linked Employer-Employee Data

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  • Schneck, Stefan

Abstract

This paper examines employer-to-employer mobility by describing the individual wage trajectories along the working career. The model, which is designed to introduce optimal between-firm mobility, is based on the search, the matching, and the human capital theory. It is emphasized that hopping from one wage trajectory to another by mobility may be accompanied with wage losses. An empirical review of the model extracts information on whether the between-firm mobility wage trajectory exceeds the within-firm wage path. The results are in line with the optimal employer-to-employer mobility model derived in this paper. Furthermore, it is shown that downward mobility as well as upward mobility is very common in reality, and that both types of mobility are shown to cause wage losses.

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File URL: http://www3.wiwi.uni-hannover.de/Forschung/Diskussionspapiere/dp-403.pdf
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Bibliographic Info

Paper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover with number dp-403.

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Length: 33 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:han:dpaper:dp-403

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Keywords: Employer-to-employer mobility; wage trajectories; wage loss;

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