Interfirm Mobility, Wages and the Returns to Seniority and Experience in the United States (original) (raw)
Interfirm Mobility, Wages and the Return to Seniority and Experience in the U.S
SSRN Electronic Journal, 2000
for their comments and discussions. Participants of seminars and conferences in Amsterdam, Brown, Crest (Malinvaud seminar), ESEM 2001 in Lausanne, Harvard, Maryland, Michigan, Pennsylvania, Tel-Aviv, Toulouse, UCLA, UCSD, Wisconsin, and Yale, provided very helpful comments. Remaining errors are ours.
Interfirm Mobility, Wages, and the Returns to Seniority and Experience in the U.S
2008
In this paper, we follow on the seminal work of Altonji and Shakotko (1987) and Topel (1991) and reinvestigate the returns to seniority in the U.S. These papers specify a wage function, in which workers’ wages can change through two channels: (a) returns to their seniority; and (b) returns to their labor market experience. We start from the same wage equation as in previous studies, and, following our theoretical model, we explicitly include a participation-employment equation and an interfirm mobility equation. The employment and mobility decisions define the individual’s experience and seniority. Because experience and seniority are fully endogenized, we introduce into the wage equation a summary of the workers’ entire career and past jobs. The three-equation system is estimated simultaneously using the Panel Study of Income Dynamics (PSID). For all three education groups that we study, returns to seniority are quite high, even higher than what was previously obtained by Topel. On...
Job Mobility and Wages with Worker and Firm Heterogeneity
2003
In this paper we compare returns to seniority to returns to experience. We jointly model participation, wages and mobility with both worker and firm heterogeneity components. These firm-specific and worker-specific unobserved heterogeneity terms are treated as random effects. These unmeasured components are correlated across equations. Posterior estimates of the parameters are obtained using a Gibbs Sampling algorithm with data augmentation. Our data sources match longitudinal information on workers and their employing firms in France. We find similar results to Altonji and Williams' conclusions (1992, 1997): returns to experience are greater than returns to seniority.
8 ISE R W orking Paper Series Returns to Job Mobility: The Role of Observed and Unobserved Factors
2009
Non-technical summary Earnings pro les of individuals depend not only on the characteristics of workers and their employers, which may be both observable and unobservable, but also on the quality of the match between the two. The quality of the match is determined when the worker enters the rm and while successful matches are likely to continue, unsuccessful ones are likely to result in separations of workers from the rm. Both good and bad matches are at risk of job mobility. Good matches may lead to internal mobility (promotions) while bad matches lead to permanent separations from rms. Typically, analyses of the impact of job mobility on wages focus either on moves within a rm, or between rms, making it di ¢ cult to compare changes in wages associated with each type. Furthermore, although much of the di¤erences in wages are not explained by what we can observe, the nature of most data sets does not allow us to identify the e¤ect of unmeasured factors relating to the worker, the...
Wage Structure and Labor Mobility in the United States
The Structure of Wages
9. Of course, it remains an open question how much of this change is due to changes in wages for continuing workers and how much is due to changes in the workforce at the firm. 10. These rates are averages across firms and have not been employment-weighted, so they are somewhat larger than analogous accession and separation rates that are employmentweighted. In addition, these measures of worker turnover are higher than measures that use point in time changes or only count transitions for workers with some minimum duration of employment. There is an implicit duration requirement in that average real monthly earnings must exceed $100 for a worker to be counted in these statistics, but this might still include a substantial number of short duration jobs.
In this article, the effect of wages on the job tenure is studied using microeconomic data on industrial companies. The data cover a period of 11 years starting from the first quarter of 1980 and contain several pieces of information on workers, jobs, and companies. The models were estimated in a competing risk framework. According to the results the wage groups of the workers and relative wage within a company are positively related to the job tenure. These effects are larger among the persons who leave the industry than among the persons who find new industrial jobs. D
How Much Mobility? Careers, Promotions, and Wages
2015
The objective of this paper is to study the determinants of job mobility and the effect of job mobility on wages, considering not only the workers ’ career between firms, but also within firms, using a longitudinal matching employer-employee data set. The results obtained show a negative relationship between tenure and the probability of exit and that the new jobs tend to end early. Moreover, the career advancement within the firm has a negative impact on the probability to exit. Concerning wages, job separations can have a positive impact on wage growth, especially for the younger workers and also for industry changes. This shows that the workers ’ movements between employers and industries are important to enhance their career prospects.
Journal of the Royal Statistical Society Series A (Statistics in Society)
Summary. The aim of the paper is to investigate the effect of measurement error on low pay transition probabilities. Our approach combines the virtues of panel regression and latent class models, though it does not require the use of validation or reinterview data. Using British, German and Dutch panel data, we show that the true estimated low pay transition probability is much lower that what previous research has found.This implies that almost half of the observed transitions can be attributed to measurement error. The highest low pay transition probabilities are found in Germany and the lowest in the Netherlands. When applying this correction for measurement error in a multivariate model of low pay transitions, the results indicate that measurement error attenuates considerably the effects of the main covariates, such as training, job change, change in the type of employment contract and shift from part-time to full-time employment. Keywords: Low pay; Markov model; Measurement er...
Wages, Mobility and Firm Performance: Advantages and Insights from Using Matched Worker���Firm Data*
2006
To illustrate the wide applicability of longitudinal matched employer-employee data, we study the simultaneous determination of worker mobility and wage rates using an econometric model that allows for both individual and firm-level heterogeneity. The model is estimated using longitudinally linked employer-employee data from France. Structural results for mobility show remarkable heterogeneity with both positive and negative duration dependence present in a significant proportion of firms. The average structural returns to seniority are essentially zero, but this result masks enormous heterogeneity with positive seniority returns found in low starting-wage firms. In this article, we reconsider the relation between earnings and mobility using newly developed longitudinal matched employer-employee data. Our research is positioned at the intersection of labour economics and human resource management; however, the techniques we use and the ideas we examine have broad applicability. We develop this idea immediately. Longitudinally linked employer-employee data can be characterised as follows. Labour markets are used as a motivating example. The population frame from which such data are created is a record of all formal jobs in the economy over a specific time period. A job consists of an association between in individual (worker) and an employing entity (firm 1 ). The longitudinally linked data are constructed following jobs over time and by adding information from two additional population frames: workers and firms. Longitudinal information from both of these sources is integrated into the job frame. Then, an analysis sample is constructed based on individuals, jobs or employers according to the question under study. Successful integration depends upon the records in the job frame containing a person and a firm identifier, which must also be used by the records in the individual and employer frames, respectively. For each job, the match between the worker and the employing firm is fully specified by these identifiers. A direct consequence of this design is that once the integrity of the identifiers is established, the job frame describes the complete graph connecting workers and firms. The analyst can study the worker at a particular job in relation to other workers at the same firm and in relation to other employers that worker has had. Identification of most of the critical components of * We thank Steve Machin and two anonymous referees for extremely helpful suggestions. We also thank participants at various seminars and conferences, in particular at Crest, Insee (JMS), Stockholm University, European Community in Brussels, CNRS at Caen and ESSLE in Ammersee. The data used in this article are confidential but the authorsÕ access is not exclusive. For additional information, contact F. Kramarz
Chapter 11 Heterogeneity in Firms’ Wages and Mobility Policies
Structural Models of Wage and Employment Dynamics, 2006
We study the simultaneous determination of worker mobility and wage rates using a model that allows for both individual and …rm-level heterogeneity. The model is estimated using longitudinally linked employer-employee data from France. The structural results for mobility and wages show remarkable heterogeneity. For instance, the average structural returns to seniority are essentially zero but, again, this masks enormous heterogeneity with positive seniority returns found in low starting-wage …rms. A factor analysis of the …rm-speci…c wage and mobility parameters estimates the strongest association as the contrast between high-turnover, low-wage, and high return-to-seniority …rms with low-turnover, high-wage, low return-to-seniority …rms. This result is strongly reminiscent of Job Search models à la Mortensen, that are structured along such lines.