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Regular version of the site
ФКН

ICEF Research Seminar by Annaïg Morin (Copenhagen Business School)

On Thursday, March 2 at 4.40 pm, room 3211 (Shabolovka str. 26) ICEF held the Research Seminar.
Speaker: Annaïg Morin (Copenhagen Business School)
Theme: "Job-to-Job Transitions, Sorting, and Wage Growth" joint with David Jinkins

Abstract: This paper assesses the contribution of match quality to the wage growth experienced by job movers. We first scrutinize the assumption of exogenous mobility of workers that is required to estimate wage equations with worker and firm fixed effects. We reject this assumption in the Danish matched employer-employee data using various statistical and heuristic tests. This result indicates that job movers transition to new firms partly to improve the quality of their match, an improvement that translates into higher wages. Second, to estimate firm fixed effects we focus on the sub-sample of workers hired from unemployment. We present evidence that unemployed worker mobility is conditionally orthogonal to match quality, in contrast to the endogenous movement of workers transitioning from job to job. With firm fixed effects in hand, we are able to decompose the wage growth of all job movers into changes in the firm fixed effect and match quality. We find that 45% of the wage gain experienced by job movers can be attributed to improvement in match quality. The growth in match quality is stronger for workers moving to less productive firms. Ultimately, this analysis enables us to quantify the importance of sorting in explaining the mobility decision of workers, and to analyze the heterogeneous patterns of sorting across workers. 


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