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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

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Abraham, Martin

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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    File URL: http://doku.iab.de/discussionpapers/2015/dp1415.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Reichelt, Malte & Haas, Anette, 2015. "Commuting farther and earning more? : how employment density moderates workers commuting distance," IAB Discussion Paper 201533, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Meurers, Martin & Moenius, Johannes, 2018. "Optimal Public Investment in Economic Centers and the Periphery," Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181579, Verein für Socialpolitik / German Economic Association.
    3. repec:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0220-x is not listed on IDEAS
    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].

    More about this item

    Keywords

    Arbeitskräftemobilität; Lohnhöhe; Lohnunterschied; regionale Mobilität; berufliche Mobilität; Ungleichheit; Berufswechsel; Einkommenseffekte;

    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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