Risk Attitudes, Job Mobility and Subsequent Wage Growth During the Early Career

26 Pages Posted: 31 May 2017

See all articles by Bethlehem Argaw

Bethlehem Argaw

Leibniz Universit├Ąt Hannover

Michael F. Maier

Center for European Economic Research (ZEW)

Olga J. Skriabikova

Maastricht University

Date Written: April 4, 2017

Abstract

Job change is a decision under uncertainty: It is associated with costs whereas the decision is made without full knowledge about future benefits. In order to investigate the relationship between willingness to take risks and job mobility, we first extend a model for on-the-job search with non-wage job characteristics by including heterogeneity in risk attitudes. Second, we empirically test the model's implications showing that individuals who are more risk-averse choose to change their jobs less often than more risk-tolerant individuals. This difference in the job changing behaviour leads to only moderate differences wage growth during early career: Risk-averse individuals tend to have on average higher wage gains from each job change and have obtained higher overall wage growth at the end of the early career phase.

Keywords: risk attitudes, job mobility, wage growth, early career development

JEL Classification: D81, J31, J62

Suggested Citation

Argaw, Bethlehem and Maier, Michael F. and Skriabikova, Olga J., Risk Attitudes, Job Mobility and Subsequent Wage Growth During the Early Career (April 4, 2017). ZEW - Centre for European Economic Research Discussion Paper No. 17-023, Available at SSRN: https://ssrn.com/abstract=2977217 or http://dx.doi.org/10.2139/ssrn.2977217

Bethlehem Argaw

Leibniz Universit├Ąt Hannover ( email )

Welfengarten 1
D-30167 Hannover, 30167
Germany

Michael F. Maier (Contact Author)

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Olga J. Skriabikova

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
42
Abstract Views
482
PlumX Metrics