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Job-to-Job Transitions, Sorting, and Wage Growth

Author

Listed:
  • Jinkins, David

    () (Copenhagen Business School)

  • Morin, Annaig

    (CEBR, Copenhagen)

Abstract

We measure the contribution of match quality to the wage growth experienced by job movers. We reject the exogenous mobility assumption needed to estimate a standard fixed-effects wage regression in the Danish matched employer-employee data. We exploit the sub-sample of workers hired from unemployment, for whom the exogenous mobility assumption is not rejected, to estimate firm fixed effects. We then decompose the variance of wage growth of all job movers. We find that 66% of the variance of wage growth experienced by job movers can be attributed to variance in match quality. Expected match quality growth is higher for higher-skilled occupations.

Suggested Citation

  • Jinkins, David & Morin, Annaig, 2017. "Job-to-Job Transitions, Sorting, and Wage Growth," IZA Discussion Papers 10601, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10601
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    References listed on IDEAS

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    More about this item

    Keywords

    job mobility; fixed-effect wage models; assortative matching; panel data models;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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