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Job Switching Wage Premium

Author

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  • Keenan, Enda

    (Central Bank of Ireland)

Abstract

This paper explores the wage premium associated with job switching in Ireland by utilising newly available gross pay data from the Labour Force Survey (LFS) linked to administrative data on individual earnings. Job switching, or moving directly from one job to another, is often driven by the potential for wage increases and improved job matches. While job switching behaviour tends to vary with business cycles, this analysis finds that job switchers in Ireland experience a wage premium. By controlling for demographic factors such as age, education and sector, the estimated wage premium for job switchers lies between 2.3 per cent and 2.4 per cent in the quarter immediately following a job change.

Suggested Citation

  • Keenan, Enda, 2024. "Job Switching Wage Premium," Research Technical Papers 7/RT/24, Central Bank of Ireland.
    • Handle: RePEc:cbi:wpaper:7/rt/24
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    File URL: https://www.centralbank.ie/docs/default-source/publications/research-technical-papers/07rt24-job-switching-wage-premium-(keenan).pdf?sfvrsn=1e3b641a_4
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    References listed on IDEAS

    as
    1. Aaron Amburgey & Serdar Birinci, 2021. "Job Switching Rates during a Recession," On the Economy 94023, Federal Reserve Bank of St. Louis.
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    3. John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2018. "Who Moves Up the Job Ladder?," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 301-336.
    4. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
    5. Boyd, Laura & Keenan, Enda & McIndoe-Calder, Tara, 2023. "Earnings growth under high inflation," Quarterly Bulletin Articles, Central Bank of Ireland, pages 89-123, September.
    6. Staunton, David & Lydon, Reamonn, 2018. "Does increased job switching signal higher wage growth?," Economic Letters 13/EL/18, Central Bank of Ireland.
    7. Boyd, Laura & Byrne, Stephen & Keenen, Enda & McIndoe Calder, Tara, 2022. "Labour market recovery after a pandemic," Quarterly Bulletin Articles, Central Bank of Ireland, pages 89-129, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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