IDEAS home Printed from https://ideas.repec.org/p/irs/iriswp/2007-16.html
   My bibliography  Save this paper

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

Author

Listed:
  • FOUARGE Didier
  • MUFFELS Ruud
  • PAVLOPOULOS Dimitris
  • VERMUNT Jeroen K.

Abstract

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.

Suggested Citation

  • FOUARGE Didier & MUFFELS Ruud & PAVLOPOULOS Dimitris & VERMUNT Jeroen K., 2007. "Who benefits from a job change: The dwarfs or the giants?," IRISS Working Paper Series 2007-16, IRISS at CEPS/INSTEAD.
  • Handle: RePEc:irs:iriswp:2007-16
    as

    Download full text from publisher

    File URL: https://liser.elsevierpure.com/en/publications/who-benefits-from-a-job-change-the-dwarfs-or-the-giants
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ann P. Bartel & George J. Borjas, 1981. "Wage Growth and Job Turnover: An Empirical Analysis," NBER Chapters, in: Studies in Labor Markets, pages 65-90, National Bureau of Economic Research, Inc.
    2. KATRNAK Tomas & KRIZOVA Iva & VALENTOVA Marie, 2007. "Occupational Gender Segregation in the light of the Segregation in Education: A Cross-National Comparison," IRISS Working Paper Series 2007-04, IRISS at CEPS/INSTEAD.
    3. Stéphane Mussard & Bernard Philippe, 2010. "Une évaluation du rôle des déterminants du partage de la valeur ajoutée," Economie & Prévision, La Documentation Française, vol. 0(1), pages 99-119.
    4. Clark, Andrew E., 1999. "Are wages habit-forming? evidence from micro data," Journal of Economic Behavior & Organization, Elsevier, vol. 39(2), pages 179-200, June.
    5. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training in Europe," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 346-360, 04/05.
    6. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling low income transitions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(5), pages 593-610.
    7. Stewart, Mark B & Swaffield, Joanna K, 1999. "Low Pay Dynamics and Transition Probabilities," Economica, London School of Economics and Political Science, vol. 66(261), pages 23-42, February.
    8. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    9. WESIAK Dorota, 2007. "Measurement of national intellectual capital: application to EU countries," IRISS Working Paper Series 2007-13, IRISS at CEPS/INSTEAD.
    10. Christian Dustmann & Costas Meghir, 2005. "Wages, Experience and Seniority," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 77-108.
    11. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    12. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 921-955.
    13. POPESCU Livia & RAT Cristina & REBELEANU-BERECZKI Adina, 2007. "Self-Assessed Health Status and Satisfaction with Health Care Services in the Context of the Enlarged European Union," IRISS Working Paper Series 2007-14, IRISS at CEPS/INSTEAD.
    14. Black, Matthew, 1980. "Pecuniary Implications of On-the-Job Search and Quit Activity," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 222-229, May.
    15. Audrey Light & Kathleen McGarry, 1998. "Job Change Patterns And The Wages Of Young Men," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 276-286, May.
    16. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    17. Jung, Robert C & Winkelmann, Rainer, 1993. "Two Aspects of Labor Mobility: A Bivariate Poisson Regression Approach," Empirical Economics, Springer, vol. 18(3), pages 543-556.
    18. Vella, Francis & Verbeek, Marno, 1999. "Estimating and Interpreting Models with Endogenous Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(4), pages 473-478, October.
    19. D'ANGELO Emanuela & LILLA Marco, 2007. "Is there more than one linkage between Social Network and Inequality?," IRISS Working Paper Series 2007-12, IRISS at CEPS/INSTEAD.
    20. Stéphane Mussard & Michel Terraza, 2009. "Décompositions des mesures d'inégalité : le cas des coefficients de Gini et d'entropie," Recherches économiques de Louvain, De Boeck Université, vol. 75(2), pages 151-181.
    21. LILLA Marco, 2007. "Income Inequality and Education Premia," IRISS Working Paper Series 2007-11, IRISS at CEPS/INSTEAD.
    22. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    23. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
    24. Jacob Mincer, 1986. "Wage Changes in Job Changes," NBER Working Papers 1907, National Bureau of Economic Research, Inc.
    25. François Bourguignon & Martin Fournier & Marc Gurgand, 2007. "Selection Bias Corrections Based On The Multinomial Logit Model: Monte Carlo Comparisons," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 174-205, February.
    26. Royalty, Anne Beeson, 1998. "Job-to-Job and Job-to-Nonemployment Turnover by Gender and Education Level," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 392-443, April.
    27. Farber, Henry S, 1994. "The Analysis of Interfirm Worker Mobility," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 554-593, October.
    28. MARTIN Ludivine, 2007. "The impact of technological changes on incentives and motivations to work hard," IRISS Working Paper Series 2007-15, IRISS at CEPS/INSTEAD.
    29. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
    30. STANCIOLE Anderson, 2007. "Health Insurance and Life Style Choices: Identifying the Ex Ante Moral Hazard," IRISS Working Paper Series 2007-10, IRISS at CEPS/INSTEAD.
    31. Garcia Perez, Jose Ignacio & Rebollo Sanz, Yolanda, 2005. "Wage changes through job mobility in Europe: A multinomial endogenous switching approach," Labour Economics, Elsevier, vol. 12(4), pages 531-555, August.
    32. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 439-479.
    33. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-1260, December.
    34. STRAPCOVA Katarina & VOICU Bogdan & VOICU Malina, 2007. "Engendered housework. A cross-european analysis," IRISS Working Paper Series 2007-07, IRISS at CEPS/INSTEAD.
    35. van den Berg, Gerard J, 1992. "A Structural Dynamic Analysis of Job Turnover and the Costs Associated with Moving to Another Job," Economic Journal, Royal Economic Society, vol. 102(414), pages 1116-1133, September.
    36. Munasinghe, Lalith, 2000. "Wage Growth and the Theory of Turnover," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 204-220, April.
    37. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
    38. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    39. Francine D. Blau & Lawrence M. Kahn, 1981. "Race and Sex Differences in Quits by Young Workers," ILR Review, Cornell University, ILR School, vol. 34(4), pages 563-577, July.
    40. VALENTOVA Marie, 2007. "Attitudes to Family Policy Arrangements in Relation to Attitudes to Family and division of Labour between Genders," IRISS Working Paper Series 2007-05, IRISS at CEPS/INSTEAD.
    41. Edward P. Lazear, 1999. "Personnel Economics: Past Lessons and Future Directions," NBER Working Papers 6957, National Bureau of Economic Research, Inc.
    42. KANKARASH Milosh & MOORS Guy, 2007. "Heterogeneity in solidarity attitudes in Europe. Insights from a multiple-group latent-class factor approach," IRISS Working Paper Series 2007-06, IRISS at CEPS/INSTEAD.
    43. Munasinghe, Lalith & Sigman, Karl, 2004. "A hobo syndrome? Mobility, wages, and job turnover," Labour Economics, Elsevier, vol. 11(2), pages 191-218, April.
    44. RAILEANU SZELES Monica, 2007. "The patterns and causes of social exclusion in Luxembourg," IRISS Working Paper Series 2007-09, IRISS at CEPS/INSTEAD.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adele Bergin, 2015. "Employer Changes and Wage Changes: Estimation with Measurement Error in a Binary Variable," LABOUR, CEIS, vol. 29(2), pages 194-223, June.
    2. María Cervini-Plá & Antonia López-Villavicencio & José Ignacio Silva, 2015. "The heterogeneous cyclicality of income and wages among the distribution," Working Papers halshs-01133823, HAL.
    3. Argaw, Bethlehem A. & Maier, Michael F. & Skriabikova, Olga J., 2017. "Risk attitudes, job mobility and subsequent wage growth during the early career," ZEW Discussion Papers 17-023, ZEW - Leibniz Centre for European Economic Research.
    4. Johannes Wieschke, 2018. "Frequency of employer changes and their financial return: gender differences amongst German university graduates," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-13, December.
    5. Adele Bergin, 2013. "Job Changes and Wage Changes: Estimation with Measurement Error in a Binary Variable," Economics Department Working Paper Series n240-13.pdf, Department of Economics, National University of Ireland - Maynooth.
    6. PREJMEREAN Mihaela Cornelia & VASILACHE Simona, 2008. "What's a univesity worth? Changes in the lifestyle and status of post-2000 European Graduates," IRISS Working Paper Series 05, IRISS at CEPS/INSTEAD.
    7. Wieschke, Johannes, 2018. "Frequency of employer changes and their financial return: gender differences amongst German university graduates," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages .1(1-13).
    8. Marina Checa-Olivas & Bladimir de la Hoz-Rosales & Rafael Cano-Guervos, 2021. "The Impact of Employment Quality and Housing Quality on Human Development in the European Union," Sustainability, MDPI, vol. 13(2), pages 1-12, January.
    9. Lorenzo Corsini, 2012. "Institutions, Technological Change and Wage Differentials between Skilled and Unskilled Workers: Theory and Evidence from Europe," Research in Labor Economics, in: Solomon W. Polachek & Konstantinos Tatsiramos (ed.), Research in Labor Economics, volume 36, pages 1-33, Emerald Publishing Ltd.
    10. Prejmerean, Mihaela Cornelia & Vasilache, Simona, 2008. "What's a university worth? Changes in the lifestyle and status of post-2000 European Graduates," IRISS Working Paper Series 2008-05, IRISS at CEPS/INSTEAD.
    11. Wieschke, Johannes, 2018. "Frequency of employer changes and their financial return: gender differences amongst German university graduates," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages 1-1.
    12. Mark Gius, 2014. "The impact of job mobility on earnings: using occupational and industrial classifications to identify job changes," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(2), pages 181-190, March.
    13. Maier, Michael & Argaw, Bethlehem A. & Maier, Michael F. & Skriabikova, Olga J., 2016. "Risk attitudes, job mobility and subsequent wage growth during the early career," VfS Annual Conference 2016 (Augsburg): Demographic Change 145677, Verein für Socialpolitik / German Economic Association.
    14. Filandri, Marianna & Struffolino, Emanuela, 2019. "Individual and household in-work poverty in Europe: understanding the role of labor market characteristics," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 130-157.
    15. Mattia Filomena, 2021. "Unemployment Scarring Effects: A Symposium On Empirical Literature," Working Papers 453, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. MARTIN Ludivine, 2007. "The impact of technological changes on incentives and motivations to work hard," IRISS Working Paper Series 2007-15, IRISS at CEPS/INSTEAD.
    2. Lorenzo Corsini, 2012. "Institutions, Technological Change and Wage Differentials between Skilled and Unskilled Workers: Theory and Evidence from Europe," Research in Labor Economics, in: Solomon W. Polachek & Konstantinos Tatsiramos (ed.), Research in Labor Economics, volume 36, pages 1-33, Emerald Publishing Ltd.
    3. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    4. Prejmerean, Mihaela Cornelia & Vasilache, Simona, 2008. "What's a university worth? Changes in the lifestyle and status of post-2000 European Graduates," IRISS Working Paper Series 2008-05, IRISS at CEPS/INSTEAD.
    5. Ferreira, Priscila, 2009. "The determinants of promotions and firm separations," ISER Working Paper Series 2009-11, Institute for Social and Economic Research.
    6. Maite Blázquez, 2009. "Earnings mobility in Spain: the role of job mobility and contractual arrangements," Spanish Economic Review, Springer;Spanish Economic Association, vol. 11(3), pages 179-205, September.
    7. Maria A. Davia, 2010. "Job Mobility And Wage Growth At The Beginning Of The Professional Career In Spain," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 18(1), pages 5-34, Spring.
    8. LILLA Marco, 2007. "Income Inequality and Education Premia," IRISS Working Paper Series 2007-11, IRISS at CEPS/INSTEAD.
    9. Frederiksen, Anders & Halliday, Timothy J. & Koch, Alexander K., 2010. "What Do We Work For? An Anatomy of Pre- and Post-Tax Earnings Growth," IZA Discussion Papers 5298, Institute of Labor Economics (IZA).
    10. Argaw, Bethlehem A. & Maier, Michael F. & Skriabikova, Olga J., 2017. "Risk attitudes, job mobility and subsequent wage growth during the early career," ZEW Discussion Papers 17-023, ZEW - Leibniz Centre for European Economic Research.
    11. Maier, Michael & Argaw, Bethlehem A. & Maier, Michael F. & Skriabikova, Olga J., 2016. "Risk attitudes, job mobility and subsequent wage growth during the early career," VfS Annual Conference 2016 (Augsburg): Demographic Change 145677, Verein für Socialpolitik / German Economic Association.
    12. Ghosh, Suman, 2007. "Job mobility and careers in firms," Labour Economics, Elsevier, vol. 14(3), pages 603-621, June.
    13. Cassidy, Hugh & DeVaro, Jed & Kauhanen, Antti, 2016. "Promotion signaling, gender, and turnover: New theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 140-166.
    14. C. Sofia Machado & Miguel Portela, 2011. "Age and opportunities for promotion," NIPE Working Papers 03/2011, NIPE - Universidade do Minho.
    15. PREJMEREAN Mihaela Cornelia & VASILACHE Simona, 2008. "What's a univesity worth? Changes in the lifestyle and status of post-2000 European Graduates," IRISS Working Paper Series 05, IRISS at CEPS/INSTEAD.
    16. Anders Frederiksen & Timothy Halliday & Alexander K. Koch, 2016. "Within- and Cross-Firm Mobility and Earnings Growth," ILR Review, Cornell University, ILR School, vol. 69(2), pages 320-353, March.
    17. Roland A. Amann & Tobias J. Klein, 2012. "Returns to type or tenure?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 175(1), pages 153-166, January.
    18. Arranz, Jose M. & Davia, Maria A. & Garcia-Serrano, Carlos, 2005. "Labour market transitions and wage dynamics in Europe," ISER Working Paper Series 2005-17, Institute for Social and Economic Research.
    19. Drago, Francesco, 2006. "Career Consequences of Hyperbolic Time Preferences," IZA Discussion Papers 2113, Institute of Labor Economics (IZA).
    20. Bas Klaauw & António Dias da Silva, 2011. "Wage dynamics and promotions inside and between firms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1513-1548, October.
    21. Dohmen, Thomas J. & Pfann, Gerard A., 2004. "Worker separations in a nonstationary corporate environment," European Economic Review, Elsevier, vol. 48(3), pages 645-663, June.

    More about this item

    Keywords

    low pay; high pay; job mobility; wage mobility;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:irs:iriswp:2007-16. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/cepsslu.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Philippe Van Kerm (email available below). General contact details of provider: https://edirc.repec.org/data/cepsslu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.