Job Mobility and Earnings Growth

Abstract

The relationship between job mobility and earnings growth is a theoretically important but empirically neglected issue. How important are job shifts as a mechanism in the development of earnings over the life cycle? We estimate the impact of internal and external mobility on earnings growth from age 26 to 35, a crucial formative period in work‐life careers. We present a new specification for measuring long‐term effects of job shift sequences, and report the following main findings on the basis of data on male wage‐earners in Sweden. First, internal and external job shifts are distinct pathways in work‐life careers; very few individuals pursue both routes. Secondly, both kinds of mobility increase earnings growth. Internal mobility has the strongest impact. While the economic returns of internal job shifts increase with their frequency, the returns of changing employer diminish rapidly. Thirdly, the impact of firm tenure and external mobility should be considered simultaneously, otherwise the effects of both are biased downward. However, the tenure effect on earnings is largely unrelated to internal job shifts. Fourthly, the impact of internal mobility on earnings growth chiefly operates net of occupational advancement, while the effects of external mobility to a considerable extent run via occupational attainment.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 80 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.