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

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  • Jinkins, David Carson

    (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 Carson & Morin, Annaig, 2017. "Job-to-Job Transitions, Sorting, and Wage Growth," IZA Discussion Papers 10601, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10601
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    3. Frings, Hanna & Kamb, Rebecca, 2022. "The relative importance of portable and non-portable agglomeration effects for the urban wage premium," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    4. Fehn, Rebecca & Frings, Hanna, 2018. "Decomposing the Returns to Regional Mobility," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181609, Verein für Socialpolitik / German Economic Association.
    5. Bertheau, Antoine & Vejlin, Rune Majlund, 2023. "Job Ladders by Firm Wage and Productivity," IZA Discussion Papers 15872, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    job mobility; fixed-effect wage models; assortative matching; panel data models;
    All these keywords.

    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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