Job mobility, earnings and productivity

Matched employer-employee data research has found that workers’ wages are affected by the characteristics of the firms they work in, and that higher skilled workers tend to be employed by higher paying firms. A paper by Hyslop and Maré (2009) examines the contribution of workers’ job mobility to their wage dynamics. It focuses on the possible trade-off between moving to a better paying firm and losing a firm-tenure specific component of earnings, and examines what types of workers benefit from changing firms, rather than staying with their existing employer.

After controlling for observable differences between job-movers and job-stayers, job-movers have about 1.3 percent lower annual earnings growth than non-movers. Job-movers gain 0.3 percent per year on average from moving to higher paying firms, but lose 1.6 percent in transitory earnings associated with changing jobs. The gains from moving to better firms are larger for both younger and new entrant workers, while the transitory earnings losses are smaller. The researchers interpret these findings as being due to an earnings growth trade-off for workers between moving to a higher paying firm and losing their tenure-related earnings at their existing firm.

The research drew on methodology developed in an earlier study, Maré and Hyslop (2006).

To download Hyslop and Maré (2009) follow this link
Job Mobility and Wage Dynamics.

To download Maré and Hyslop (2006) follow this link
Worker-firm heterogeneity and matching.