Wage Risk and the Value of Job Mobility in Early Employment Careers

Kai Liu

Journal of Labor Economics, 2019, vol. 37, issue 1, 139 - 185

Abstract: This paper shows that job mobility is a valuable channel that employed workers use to mitigate bad labor market shocks. I estimate a model of wage dynamics jointly with a dynamic model of employment and job mobility. The key feature of the model is the specification of wage shocks at the worker-firm-match level, for workers can respond to these shocks by changing jobs. I find that, relative to the variance of individual-level shocks, the variance of match-level shocks is large and the consequent value of job mobility is substantial, particularly for workers whose match-specific wages are low.

Date: 2019
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Citations: View citations in EconPapers (8)

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