What's Up with U.S. Wage Growth and Job Mobility?


Book Description

Since the global financial crisis, US wage growth has been sluggish. Drawing on individual earnings data from the 2000–15 Current Population Survey, I find that the drawn-out cyclical labor market repair—likely owing to low entry wages of new workers—slowed down real wage growth. There are, however, also signs of structural changes in the labor market affecting wages: for full-time, full-employed workers, the Wage-Phillips curve—the empirical relationship between wage growth and the unemployment rate—has become horizontal after 2008. Similarly, job-turnover rates have continued to decline. Job-to-job transitions—associated with higher wage growth—have slowed across all skill and age groups and beyond what local labor market conditions would imply. This raises concerns about the allocative ability of the labor market to adjust to changing economic conditions.




On Job Mobility and Earnings Growth


Book Description

This study examines the relationship between job mobility (mobility between employers), and wage growth. This relationship is examined in the short term (year-to-year) as well as in the medium-long term (after five years). Findings are presented for three sub-periods of equal length within the overall period, referring to a decade and a half between 1990 and 2005, with the aim of learning about the persistence and stability of this relationship throughout demographically, economically and socially distinct periods. The data used in this study come from the administrative data of the Tax Authorities, combined with additional demographic and economic data from other sources. According to the data, job stability noticeably diminished between the first and second half of the 1990s, and remained at a similar level afterwards.In the short term, the results show that job mobility -- even when voluntary -- has a negative effect on wage growth in each of the three studied periods, regardless of market and social conditions in these periods. Nevertheless, from a cumulative perspective over a period of five years, involuntary job mobility appears to have a negative effect on wage levels in the long term as well, while the findings regarding voluntary mobility are inconclusive but may be positive. The long-term moderate increase in wages related to job mobility may be explained by the hypothesis that in the current labor market, employees regard transitions between employers as a form of investment that carries certain risks but may be fruitful in the long term, despite its short-term costs -- similar to what the human capital theory suggests regarding the acquisition of education or any other professional training. The findings also show that the effect of job mobility on wage growth in the long term is not resistant to periodical conditions and changes between the different periodsConsidering the transition costs of job mobility, which are not taken into account in this study, job stability seems to be related, for the most part, to better wage growth.




Job Mobility, Gender Composition, and Wage Growth


Book Description

To explain the gender wage growth gap, sociologists tend to focus on gender segregation among/within jobs whereas economists put emphasis on individual job mobility. This study adopted a concept combining both segregation and mobility. The concept helps to take the gender segregation before and after job mobility into account to strictly measure the mechanisms of wage growth. For analysis, this study used 6-year personnel data of a firm, which allows researchers to track employees' job mobility, wages, and job information at the most accurate level. The concept of combining segregation and mobility was operated through the gender composition of jobs and employee job change, which generated ten patterns. Among them, the following six were focused: staying in male or female jobs, movement between male or female jobs, and movement toward male or female jobs. While controlling wages at prior jobs, the multilevel model analysis shows that the wage growth rates in the six mobility patterns were stratified as follows: mobility between male jobs, stay in male jobs, mobility toward male jobs, mobility toward female jobs, mobility between female jobs, and stay in female jobs. This hierarchy system in the organization reveals two features: first, men's job-related mobility or stay compensated more steeply than women's job-related mobility or stay. Second, within each gender category of jobs, the mobility provided higher wage growth than stay. In sum, the gender category of jobs proceeded job mobility in terms of wage growth. Interestingly, when paying attention to the higher wage growth of 'mobility toward female jobs' than 'mobility between female jobs', this implies that the former occurred in movement from lower-level male jobs to higher-level female jobs, particularly higher than female jobs involved in the latter mobility. In view of gender regarding job mobility patterns, women and men typically did not experience differentiated salary growth. The categories of job mobility used in this paper provide a new and integrated insight for scholars who study gender segregation and job mobility, especially in view of an organization.




Job Mobility and the Careers of Young Men


Book Description

We study the joint processes of job mobility and wage growth among young men drawn from the Longitudinal Employee-Employer Data. Following individuals at three month intervals from their entry into the labor market, we track career patterns of job changing and the evolution of wages for up to 15 years. Following an initial period of weak attachment to both the labor force and particular employers, careers tend to stabilize in the sense of strong labor force attachment and increasing durability of jobs. During the first 10 years in the labor market, a typical young worker will work for seven employers, which accounts for about two-thirds of the total number of jobs he will hold in his career. The evolution of wages plays a key role in this transition to stable employment: we estimate that wage gains at job changes account for at least a third of early-career wage growth, and that the wage is the key determinant of job changing decisions among young workers. We conclude that the process of job changing for young workers, while apparently haphazard, is a critical component of workers' move toward the stable employment relations that characterize mature careers










The Structure of Wages


Book Description

The distribution of income, the rate of pay raises, and the mobility of employees is crucial to understanding labor economics. Although research abounds on the distribution of wages across individuals in the economy, wage differentials within firms remain a mystery to economists. The first effort to examine linked employer-employee data across countries, The Structure of Wages:An International Comparison analyzes labor trends and their institutional background in the United States and eight European countries. A distinguished team of contributors reveal how a rising wage variance rewards star employees at a higher rate than ever before, how talent becomes concentrated in a few firms over time, and how outside market conditions affect wages in the twenty-first century. From a comparative perspective that examines wage and income differences within and between countries such as Denmark, Italy, and the Netherlands, this volume will be required reading for economists and those working in industrial organization.







The Effectsof Labor Market Experience, Job Seniority, and Job Mobility on Wage Growth


Book Description

This paper studies the returns to seniority, the returns to experience, and the effects of seniority and experience at the time of a quit or layoff on changes in the job match specific component of wages. We show that these returns are not identified in widely used regression models that relate the wage changes of stayers, quits, and layoffs to tenure and experience. We deal with the identification of problems in two ways. First, we obtain theoretical bounds on key unidentified parameters using a simple model of wages and mobility. Second, we check the implications of assumptions about the linear tenure slope for the estimates of the returns to tenure, experience, and the effect of tenure on job match gains. We have three main empirical findings. First, there is a large return to general labor market experience that is independent of job shopping. Second, the return to tenure is probably above the Altonji and Shakotko's (1987) estimate but far below OLS estimates. Third, quits results in substantial job match gains for inexperienced workers. Layoffs are associated with the substantial job match losses for workers who have been on the job for over a year.