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Job Mobility and Earnings Over the Life Cycle

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  • George J. Borjas

Abstract

The paper analyzes the effects of job mobility on earnings both at young and at older ages. The model takes into account the discontinuity of earnings across jobs, the decline of human capital investment within the job and over the life cycle, and the effects of mobility on the slope of the earnings profile. Careful attention to the functional form of the earnings equation indicates why the coefficient of the current segment is usually larger than the coefficient of the previous segments. Findings from the NLS data include: (1.) Mobile individuals at all ages invest significantly less in on-the-job training. (2.) Although job mobility is associated with significant wage gains (across jobs), there is a substantial wage differential between the mobile and the non-mobile at older ages. (3.) The explanatory power of the earnings equation is significantly increased by accounting for the effects of job mobility; job mobility is an important determinant of the wage structure.

Suggested Citation

  • George J. Borjas, 1978. "Job Mobility and Earnings Over the Life Cycle," NBER Working Papers 0233, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:0233
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    References listed on IDEAS

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    1. Freeman, Richard B, 1974. "Occupational Training in Proprietary Schools and Technical Institutes," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 310-318, August.
    2. Ann P. Bartel & George J. Borjas, 1977. "Middle-Age Job Mobility: Its Determinants and Consequences," NBER Working Papers 0161, National Bureau of Economic Research, Inc.
    3. Malkiel, Burton G & Malkiel, Judith A, 1973. "Male-Female Pay Differentials in Professional Employment," American Economic Review, American Economic Association, vol. 63(4), pages 693-705, September.
    4. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352-352.
    5. Griliches, Zvi, 1976. "Wages of Very Young Men," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 69-85, August.
    6. Polachek, Solomon William, 1975. "Differences in Expected Post-school Investments as a Determinant of Market Wage Differentials," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(2), pages 451-470, June.
    7. Sherwin Rosen, 1972. "Learning and Experience in the Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 7(3), pages 326-342.
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    Cited by:

    1. Javier Gómez Pineda, 2004. "A Framework for Macroeconomic Stability in Emerging Market Economies," Borradores de Economia 320, Banco de la Republica de Colombia.
    2. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
    3. Emily C. Blank, 1988. "Layoffs and Wage Growth of Male Household Heads," Eastern Economic Journal, Eastern Economic Association, vol. 14(3), pages 239-250, Jul-Sep.
    4. Harvey S. James & Derek M. Johnson, 2000. "Just-cause provisions, severance pay, and the efficiency wage hypothesis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(2), pages 83-88.
    5. Nuno M. O. Romão & Vitor M. A. Escaria, 2004. "Wage mobility, Job mobility and Spatial mobility in the Portuguese economy," ERSA conference papers ersa04p584, European Regional Science Association.
    6. Alan L. Gustman & Thomas L. Steinmeier, 1982. "Partial Retirement and Wage Profiles of Older Workers," NBER Working Papers 1000, National Bureau of Economic Research, Inc.

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