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Does a change of occupation lead to higher earnings?

Author

Listed:
  • Barbara Liberda

    (Faculty of Economic Sciences, University of Warsaw)

  • Marek Pęczkowski

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

The aim of this paper is to identify how the mobility between different types of broadly defined occupation (hired work, self-employment in industry, services and agriculture or social security beneficiaries) changes personal income of individuals. We apply the Markov matrices to the panel data on 30540 individuals for 2007-2008 from the Polish Household Budget Surveys. Our hypothesis is that a change of occupation affects individual capability to earn income, controlling for the occupation a person quits and the occupation a person starts, as well as age, education level and a permanent or temporary character of work. We test our hypothesis using the regression analysis. Our results show that the inter-occupational mobility matters mostly for those quitting hired work for self-employment, for the better educated, as well as for respondents above 60 years of age.

Suggested Citation

  • Barbara Liberda & Marek Pęczkowski, 2011. "Does a change of occupation lead to higher earnings?," Working Papers 2011-09, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2011-09
    as

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    File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP49.pdf
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    References listed on IDEAS

    as
    1. Barbara Liberda, 1999. "Household Saving in Poland," CASE Network Studies and Analyses 0187, CASE-Center for Social and Economic Research.
    2. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    3. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    4. Milanovic, Branko, 2007. "Where in the world are you? Assessing the importance of circumstance and effort in a world of different mean country incomes and (almost) no migration," MPRA Paper 3420, University Library of Munich, Germany.
    5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    6. Zofia Barbara Liberda, 2007. "Income Preferences and Household Savings," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 9, pages 19-30.
    7. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    8. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    9. Gary S. Becker, 1994. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition," NBER Books, National Bureau of Economic Research, Inc, number beck94-1.
    10. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
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    12. 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(4), pages 352-352.
    13. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    income; earning; mobility; occupation; hired work; self-employment;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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