Working Paper: NBER ID: w2649
Authors: Robert H. Topel; Michael P. Ward
Abstract: We study the joint processes of job mobility and wage growth among young men drawn from the Longitudinal Employee-Employer Data. Following individuals at three month intervals from their entry into the labor market, we track career patterns of job changing and the evolution of wages for up to 15 years. Following an initial period of weak attachment to both the labor force and particular employers, careers tend to stabilize in the sense of strong labor force attachment and increasing durability of jobs. During the first 10 years in the labor market, a typical young worker will work for seven employers, which accounts for about two-thirds of the total number of jobs he will hold in his career. The evolution of wages plays a key role in this transition to stable employment: we estimate that wage gains at job changes account for at least a third of early-career wage growth, and that the wage is the key determinant of job changing decisions among young workers. We conclude that the process of job changing for young workers, while apparently haphazard, is a critical component of workers' move toward the stable employment relations that characterize mature careers.
Keywords: job mobility; wage growth; young men; labor market
JEL Codes: J63; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| wage gains at job changes (J31) | early-career wage growth (J31) |
| higher wages at job changes (J62) | reduced probabilities of changing jobs (J63) |
| wage growth (J31) | reduced job mobility (J62) |
| tenure (M51) | job-specific human capital (J24) |
| job-specific human capital (J24) | reduced job mobility (J62) |