Wage Gains Among Job Changers Across the Business Cycle: Insight from State Administrative Data

Abstract

This paper uses unique employer-employee matched administrative data files to determine that firm and industry employment dynamics play significant roles in the earnings gains of workers who change jobs and in different ways across the business cycle. Among the more notable results is the finding that job-changers who leave a firm that is shutting down experience a greater earnings loss than job-changers who leave a firm that is merely contracting. In addition, the earnings loss from changing industries where firm-specific human capital is likely to be important has the potential of creating a much greater barrier to labor mobility during recessionary times than during an expansion.

Keywords: Labor mobility, industry dynamics, administrative data

JEL Classification: J23, E32, J21