Job Changes and Individual-Job Specific Wage Dynamics
28 Pages Posted: 6 May 2009
Date Written: May 4, 2009
This paper develops an error components model that is used to examine the impact of job changes on the dynamics and variance of individual log earnings. I use data on work histories drawn from the Panel Study of Income Dynamics (PSID), that makes possible to do the distinction between voluntary an involuntary job-to-job changes. The potential endogeneity of job mobility in relation to earnings es circumvented by means of an instrument variable estimation method that also allows to control for unobserved individual-job specific heterogeneity.
Keywords: Panel data, dynamic models, individual-job specific fixed effects, job changes, individual wages
JEL Classification: C23, J31
Suggested Citation: Suggested Citation