Are Individuals Optimizing Their Wage Path? An Analysis Using Linked Employer-Employee Data

Stefan Schneck

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: This paper examines employer-to-employer mobility by describing the individual wage trajectories along the working career. The model, which is designed to introduce optimal between-firm mobility, is based on the search, the matching, and the human capital theory. It is emphasized that hopping from one wage trajectory to another by mobility may be accompanied with wage losses. An empirical review of the model extracts information on whether the between-firm mobility wage trajectory exceeds the within-firm wage path. The results are in line with the optimal employer-to-employer mobility model derived in this paper. Furthermore, it is shown that downward mobility as well as upward mobility is very common in reality, and that both types of mobility are shown to cause wage losses.

Keywords: Employer-to-employer mobility; wage trajectories; wage loss (search for similar items in EconPapers)
JEL-codes: J30 J31 J62 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2008-07
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:han:dpaper:dp-403

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