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Who benefits from a job change: The dwarfs or the giants?

  • Pavlopoulos, Dimitris

    (CEPS/INSTEAD and University of Leuven)

  • Fouarge, Didier

    (Research Center for Education and the Labour Market (ROA))

  • Muffels, Ruud

    (Tilburg University, Department of Sociology)

  • Vermunt, Jeroen K.

    (Tilburg University, Department of Methodology and Statistics)

Empirical studies have shown that voluntary job-to-job changes have a positive effect on wage mobility. In this paper, we suggest that the impact of a job change on wage growth depends on the position in the wage distribution. Using panel data from the UK and Germany, we investigate the effect of employer changes and within-firm job changes on year-to-year wage mobility. We show that a change of employer results into a wage increase for the low-paid workers but not for the high-paid workers. Within-firm job changes produce, on average, moderate wage gains for the low-paid workers in the UK, but have no effect in Germany. Results on 3-year wage mobility are shown to be very similar to the results on year-to-year wage growth.

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Paper provided by IRISS at CEPS/INSTEAD in its series IRISS Working Paper Series with number 2007-16.

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Length: 31 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:irs:iriswp:2007-16
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