Job Changes and Individual-Job Specific Wage Dynamics

Laura Hospido

No 5088, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper develops an error components model that is used to examine the impact of job changes on the dynamics and variance of individual log earnings. I use data on work histories drawn from the Panel Study of Income Dynamics (PSID) that makes it possible to distinguish between voluntary and involuntary job-to-job changes. The potential endogeneity of job mobility in relation to earnings is circumvented by means of an instrument variable estimation method that also allows to control for unobserved individual-job specific heterogeneity. Once controlled for individual and job-specific effects, the persistence within jobs is almost zero, whereas across jobs is significant but small.

Keywords: individual-job specific fixed effects; job changes; individual wages; dynamic models; panel data (search for similar items in EconPapers)
JEL-codes: C23 J31 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2010-07
New Economics Papers: this item is included in nep-bec, nep-ecm and nep-lab
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Published - published in: Labour Economics, 2015, 33, 81-93

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Working Paper: Job changes and individual-job specific wage dynamics (2009)
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