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Occupational and regional mobility as substitutes : a new approach to understanding job changes and wage inequality

Author

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  • Reichelt, Malte

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Abraham, Martin

    (University of Erlangen-Nuremberg)

Abstract

"Job mobility offers opportunities for workers to obtain wage increases, but returns to job changes differ considerably. We argue that parts of this inequality result from a trade-off between occupational and regional mobility. Both mobility types offer alternative strategies to improve one's labor market position; however, they each contain unique restrictions. High costs for regional mobility can thus evoke occupation changes, even though the resulting human capital devaluation leads to lower wage increases. We use linked retrospective life-course data for Germany (ALWA-ADIAB) and apply competing risks models to show that restrictions on one type of mobility drive individuals toward the other. Using fixed-effects regressions, we show that occupational mobility leads to lower wage increases compared to regional mobility. We conclude that the trade-off between occupational and regional mobility explains part of the differential returns to job mobility and contributes to wage inequality. We expect these mechanisms to become more pronounced in the future as technological and institutional changes alter job requirements and thereby mobility incentives." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Reichelt, Malte & Abraham, Martin, 2015. "Occupational and regional mobility as substitutes : a new approach to understanding job changes and wage inequality," IAB-Discussion Paper 201514, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201514
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    References listed on IDEAS

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    Cited by:

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    2. Meurers, Martin & Moenius, Johannes, 2018. "Optimal Public Investment in Economic Centers and the Periphery," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181579, Verein für Socialpolitik / German Economic Association.
    3. Tobias Maier & Caroline Neuber-Pohl & Anke Mönnig & Gerd Zika & Michael Kalinowski, 2017. "Modelling reallocation processes in long-term labour market projections [Modellierung von Anpassungsprozessen in langfristigen Arbeitsmarktprojektionen]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 67-90, August.
    4. Dietrich, Hans, 2015. "Jugendarbeitslosigkeit aus einer europäischen Perspektive : theoretische Ansätze, empirische Konzepte und ausgewählte Befunde," IAB-Discussion Paper 201524, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Möller, Joachim, 2015. "Verheißung oder Bedrohung? : die Arbeitsmarktwirkungen einer vierten industriellen Revolution," IAB-Discussion Paper 201518, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; berufliche Mobilität ; Berufswechsel ; Einkommenseffekte ; IAB-Datensatz Arbeiten und Lernen ; Lohnhöhe ; Lohnunterschied ; regionale Mobilität ; Arbeitskräftemobilität ; Ungleichheit ; 1993-2008;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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