Working Paper: CEPR ID: DP16961
Authors: Niklas Engbom
Abstract: Using panel data from 23 OECD countries, I document that wages grow more over the life-cycle in countries where job-to-job mobility is more common. A life-cycle theory of job shopping and accumulation of skills on the job highlights that a more fluid labor market allows workers to faster relocate to jobs where they can better use their skills, incentivizing accumulation of skills. Lower labor market fluidity reduces life-cycle wage growth by 20 percent and aggregate labor productivity by nine percent across the OECD relative to the US. I derive a set of testable predictions for training and confront them with comparable cross-country training data, finding support for the theory.
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JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor market fluidity (J60) | lifecycle wage growth (J31) |
| job-to-job mobility (J62) | wage increases (J38) |
| labor market fluidity (J60) | skill accumulation (J24) |
| skill accumulation (J24) | wage growth (J31) |
| lower labor market fluidity (J69) | aggregate productivity (E23) |
| job mobility (J62) | wage growth (J31) |