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Occupational Mobility and Wage Dynamics Within and Between Firms

  • Jean-Marc Robin

    (Sciences-Po)

  • Fabien Postel-Vinay

    (University College London)

  • Francis Kramarz

    (CREST)

Recent research has emphasized the key importance of the equilibrium allocation of heterogeneous workers into heterogeneous jobs or occupations as a determinant of economic efficiency. Most of the literature on this subject envisions worker (re-)allocation as occurring between employers. Yet, the data suggest that a very large amount of reallocation occurs within firms, in the form of internal promotions or de-motions. We construct a structural job search model with internal and external labor markets. Internal labor markets mediate occupational mobility and wage dynamics within firms, whereas the external labor market organizes any mobility involving an employer change, and related wage dynamics. The aim of this construction is to understand and quantify the role of within-firm reallocation in the assignment process of workers into jobs. The model is estimated on a large-scale matched employer-employee data set covering the entire French business sector.

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Paper provided by Society for Economic Dynamics in its series 2014 Meeting Papers with number 168.

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Date of creation: 2014
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Handle: RePEc:red:sed014:168
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

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