Is Job Stability at the Outset of One’s Career Good for its Continuation?

Abstract:     
Most employment mobility takes place at the beginning of the individual’s employment career. Individuals need this mobility to learn the conditions of the market and find a job that best matches their qualifications with their wages. We regard the “intifada,” which triggered a severe recession in Israel in 2001-2003 and dampened demand for labor in all industries except security services, as an exogenous shock to the labor market. This shock transformed the security-services industry, which until then had provided temporary employment for pre-professional population groups, into a source of long-term, long-hours employment. Our research hypothesis is that the lengthy employment in this industry, occasioned by the weakness of the labor market, deprived the cohort of young adults who joined it during the intifada of “healthy” mobility elsewhere in the economy. Consequently, the careers of members of this cohort were diverted to a flatter path of wage growth than the career paths of young adults who joined the security-services industry before the intifada and eventually left it for jobs in other industries.

The study yields four main findings. First, those who joined the security-services industry during the intifada were more likely to stay in this industry in the medium term than those who accepted such jobs previously. Second, the cohort that joined the industry during the intifada had less employment mobility than those who had joined previously. Third, the cohort that joined the industry during the intifada is ultimately less connected with the labor market than those who joined it previously. Fourth, the earning horizon of those who joined the industry during the intifada is significantly different from those who joined it previously, to the advantage of the latter. Overall, these findings demonstrate, via the example of one industry, that being attached to an employer for lengthy periods of time reduces employment mobility at the outset of one’s career impairs the earning trajectory and weakens one’s attachment to the labor market.

Number of Pages in PDF File: 34

Keywords: Employment Mobility, Security Services, Career Development

JEL Classification: J22, J31, J62

working papers series