Who benefits from a job change

The dwarfs or the giants?

D.P. Pavlopoulos, D.J.A.G. Fouarge, R.J.A. Muffels, J.K. Vermunt

Research output: Contribution to journalArticleScientificpeer-review

Abstract

In this paper, we use panel data from the UK and Germany to investigate the effect of employer changes and in-firm job changes on year-to-year wage mobility of male full-time workers. Following segmentation theories and the job search theory, we study whether this effect differs for the low- and high-wage workers. As wage growth is endogenous to the decision of changing jobs, a two-stage Heckman selection approach is used. Specifically, we first estimate a random-effects multinomial logit model for the selection into a job transition and then a fixed-effects panel regression model for the wage growth. The findings suggest that both external and in-firm job changes result into substantial wage gains for the low-paid workers but not for the medium- or high-paid workers. However, the wage gain of low-paid workers due to an in-firm job change is only observed in the UK and is less pronounced than their gain by an external job change. In the German labour market, the later effect is insignificant. The results indicate that low-paid workers profit more from a voluntary change of employer in the coordinated German labour market and from a voluntary in-firm change in the liberal British labour market.
Original languageEnglish
Pages (from-to)299-319
JournalEuropean Societies
Volume16
DOIs
Publication statusPublished - 2014

Fingerprint

job change
wage
worker
firm
labor market
employer
job search
endogenous growth
low wage
panel data
profit
segmentation
regression
effect

Cite this

Pavlopoulos, D.P. ; Fouarge, D.J.A.G. ; Muffels, R.J.A. ; Vermunt, J.K. / Who benefits from a job change : The dwarfs or the giants? . In: European Societies. 2014 ; Vol. 16. pp. 299-319.
@article{e6f2ed87bead42629a525fee2b67feab,
title = "Who benefits from a job change: The dwarfs or the giants?",
abstract = "In this paper, we use panel data from the UK and Germany to investigate the effect of employer changes and in-firm job changes on year-to-year wage mobility of male full-time workers. Following segmentation theories and the job search theory, we study whether this effect differs for the low- and high-wage workers. As wage growth is endogenous to the decision of changing jobs, a two-stage Heckman selection approach is used. Specifically, we first estimate a random-effects multinomial logit model for the selection into a job transition and then a fixed-effects panel regression model for the wage growth. The findings suggest that both external and in-firm job changes result into substantial wage gains for the low-paid workers but not for the medium- or high-paid workers. However, the wage gain of low-paid workers due to an in-firm job change is only observed in the UK and is less pronounced than their gain by an external job change. In the German labour market, the later effect is insignificant. The results indicate that low-paid workers profit more from a voluntary change of employer in the coordinated German labour market and from a voluntary in-firm change in the liberal British labour market.",
author = "D.P. Pavlopoulos and D.J.A.G. Fouarge and R.J.A. Muffels and J.K. Vermunt",
year = "2014",
doi = "10.1080/14616696.2013.798019",
language = "English",
volume = "16",
pages = "299--319",
journal = "European Societies",
issn = "1461-6696",
publisher = "Routledge",

}

Who benefits from a job change : The dwarfs or the giants? . / Pavlopoulos, D.P.; Fouarge, D.J.A.G.; Muffels, R.J.A.; Vermunt, J.K.

In: European Societies, Vol. 16, 2014, p. 299-319.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - Who benefits from a job change

T2 - The dwarfs or the giants?

AU - Pavlopoulos, D.P.

AU - Fouarge, D.J.A.G.

AU - Muffels, R.J.A.

AU - Vermunt, J.K.

PY - 2014

Y1 - 2014

N2 - In this paper, we use panel data from the UK and Germany to investigate the effect of employer changes and in-firm job changes on year-to-year wage mobility of male full-time workers. Following segmentation theories and the job search theory, we study whether this effect differs for the low- and high-wage workers. As wage growth is endogenous to the decision of changing jobs, a two-stage Heckman selection approach is used. Specifically, we first estimate a random-effects multinomial logit model for the selection into a job transition and then a fixed-effects panel regression model for the wage growth. The findings suggest that both external and in-firm job changes result into substantial wage gains for the low-paid workers but not for the medium- or high-paid workers. However, the wage gain of low-paid workers due to an in-firm job change is only observed in the UK and is less pronounced than their gain by an external job change. In the German labour market, the later effect is insignificant. The results indicate that low-paid workers profit more from a voluntary change of employer in the coordinated German labour market and from a voluntary in-firm change in the liberal British labour market.

AB - In this paper, we use panel data from the UK and Germany to investigate the effect of employer changes and in-firm job changes on year-to-year wage mobility of male full-time workers. Following segmentation theories and the job search theory, we study whether this effect differs for the low- and high-wage workers. As wage growth is endogenous to the decision of changing jobs, a two-stage Heckman selection approach is used. Specifically, we first estimate a random-effects multinomial logit model for the selection into a job transition and then a fixed-effects panel regression model for the wage growth. The findings suggest that both external and in-firm job changes result into substantial wage gains for the low-paid workers but not for the medium- or high-paid workers. However, the wage gain of low-paid workers due to an in-firm job change is only observed in the UK and is less pronounced than their gain by an external job change. In the German labour market, the later effect is insignificant. The results indicate that low-paid workers profit more from a voluntary change of employer in the coordinated German labour market and from a voluntary in-firm change in the liberal British labour market.

U2 - 10.1080/14616696.2013.798019

DO - 10.1080/14616696.2013.798019

M3 - Article

VL - 16

SP - 299

EP - 319

JO - European Societies

JF - European Societies

SN - 1461-6696

ER -