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

Author

Listed:
  • 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.

Suggested Citation

  • Panigo, Demian & Naticchioni, Paolo, 2004. "Employment protection, job-tenure and short term mobility wage gains," CEPREMAP Working Papers (Couverture Orange) 0402, CEPREMAP.
  • Handle: RePEc:cpm:cepmap:0402
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    File URL: http://www.cepremap.fr/depot/couv_orange/co0402.pdf
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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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