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Job mobility, reallocation and wage growth: A tale of two countries

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Listed:
  • Alexander Hijzen
  • Wouter Zwysen
  • Mats Erik Lillehagen

Abstract

This paper analyses the role of job mobility for job reallocation and aggregate wage growth in Norway and the United States using linked employer-employee data. It provides four main findings. First, despite lower overall job mobility in Norway, the speed of worker reallocation from low-wage to high-wage firms is similar to that in the United States. Second, job reallocation tends to be counter-cyclical in Norway, but pro-cyclical in the United States, due to the weaker tendency of high-wage firms in the United States to hoard workers during economic downturns. Third, the reallocation of workers from low to high wage firms through job-to-job mobility disproportionately benefits high-skilled workers in Norway and low-skilled workers in the United States. Fourth, the slowdown in aggregate wage growth primarily reflects a weakening of on-the-job wage growth in both countries rather than a reduced role of job reallocation between low and high-wage firms (although this does also play a role in the United States).

Suggested Citation

  • Alexander Hijzen & Wouter Zwysen & Mats Erik Lillehagen, 2021. "Job mobility, reallocation and wage growth: A tale of two countries," OECD Social, Employment and Migration Working Papers 254, OECD Publishing.
    • Handle: RePEc:oec:elsaab:254-en
    DOI: 10.1787/807becdf-en
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    More about this item

    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

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