In this paper, we measure the contribution of match quality to the wage growth experienced by job movers. Using the Danish matched employer-employee data, we reject the exogenous mobility assumption needed to estimate a standard fixedeffects wage regression. To estimate firm fixed effects, we exploit the sub-sample of workers hired from unemployment, for whom the exogenous mobility assumption is not rejected. Then we decompose the mean and the variance of wage growth of jobto-job movers. We find that most of the wage growth experienced by job movers is attributable to an improvement in the quality of the worker-firm match rather than transitions to better firms. Also, 66% of the variance of wage growth experienced by job movers can be attributed to variance in match quality. Expected match quality growth is higher for higher-skilled occupations and high-educated workers.
|Number of pages
|Published - 2017
|Conference on Markets with Search Frictions - The Aarhus Institute of Advanced Studies, Aarhus University, Aarhus, Denmark
Duration: 26 Oct 2017 → 28 Oct 2017
|Conference on Markets with Search Frictions
|The Aarhus Institute of Advanced Studies, Aarhus University
|26/10/2017 → 28/10/2017