Abstract
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.
| Original language | English |
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| Publication date | 2017 |
| Number of pages | 33 |
| Publication status | Published - 2017 |
| Event | Conference on Markets with Search Frictions - The Aarhus Institute of Advanced Studies, Aarhus University, Aarhus, Denmark Duration: 26 Oct 2017 → 28 Oct 2017 |
Conference
| Conference | Conference on Markets with Search Frictions |
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| Location | The Aarhus Institute of Advanced Studies, Aarhus University |
| Country/Territory | Denmark |
| City | Aarhus |
| Period | 26/10/2017 → 28/10/2017 |
