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Job-to-job flows and wage dynamics in France and Italy

Clémence Berson (), Marta De Philippis () and Eliana Viviano

No 563, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Some recent literature about the U.S. shows that wage dynamics are more influenced by job-to-job flows than by flows into or out of employment. In this paper, we evaluate whether this result holds also for France and Italy, characterized by a different labor market structure. Using comparable administrative data we find that, as in the U.S., in both France and Italy realized job-to-job transitions contribute positively to wage growth. However, since these flows are smaller and display much lower cyclicality than in the U.S., their contribution to aggregate wage dynamics is low, while the contribution of flows into and out of employment remains sizeable. We then look closely at the heterogeneity in the probability of changing job and in the associated wage premium by types of workers and firms. We find that job-to-job flows and the associated gain tend to be larger in high-skilled occupations and for permanent workers. Moreover, as in the U.S., individuals are more likely to move to younger firms, which intensively poach workers from other firms.

Keywords: wage dynamics; job-to-job flows; transition probabilities; Phillips curve (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-eur, nep-lab and nep-mac
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Citations: View citations in EconPapers (2) Track citations by RSS feed

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