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Occupational mobility, interfirm mobility and subsequent wage profiles
Abstract
This study investigates the job dimension of migrant behavior. It presents a model of worker mobility among occupations and employers. It is assumed that workers behave as if they monitor their expected earnings from continued employment in their present positions. Earnings are presumed to be a function of variables that describe the worker's productivity and prospects for future wage growth. Our model consists of six equations. The first two describe decisions to change occupations and employers. The dependent variables are binary, reflecting the dichotomous nature of the decisions. The remaining equations describe wage rates at the end of period. While we employ a common wage specification, we allow the coefficients of the explanatory variables to differ among the four decision regimes. Each of the equations includes a random error term which captures factors that are known to the decision maker but not measured by our data, as well as inherent randomness in the decision process. We permit nonzero correlation among the error terms in the decision equations and wage equations. This framework gives rise to our three principal items of concern. First, we seek evidence on variables that influence mobility decisions. Second, we examine the post-mobility wage profiles, seeking evidence of discrepancies across migrant regimes. Finally, we look for evidence of self selection in the mobility decision process. We estimate the model with the data collected from the University of Michigan's Panel Study of Income Dynamics (PSID). Based on the results from wage-gap calculations, it is found that within the category of occupational migrants, workers enjoy efficient economic returns, although they can be still better off by not changing employers than changing (intrafirm transfers and promotions). However, it is found that workers who end up with the same occupation with different employer suffer from wage discrepancy. The evidence of self selection is detected in occupational nonmigrants.
Subject Area
Business administration|Labor relations|Labor economics
Recommended Citation
Park, Young-Il, "Occupational mobility, interfirm mobility and subsequent wage profiles" (1993). Doctoral Dissertations Available from Proquest. AAI9329651.
https://scholarworks.umass.edu/dissertations/AAI9329651