Labour Market Entry Conditions, Wages and Job Mobility

Ronald Bachmann, Thomas Bauer () and Peggy Bechara (née David)

No 188, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Economic conditions at the time of labour market entry can induce wage differentials between workers entering the labour market at different points in time. While the existence and persistence of these entry wage differentials are well documented, little is known about their interaction with employees' mobility behaviour. This paper contributes to this research area by analyzing the interaction between job mobility and entry wage differentials using German administrative data. The results suggest that labour market entrants earning less than the average starting wage are more likely to change jobs, directly from employer to employer as well as indirectly via an unemployment spell. In addition they are more likely to change occupation. Moreover, job mobility tends to reduce the effects of labour market entry conditions, implying that job mobility operates as an adjustment mechanism that mitigates entry wage differentials. These results hold not only for high-skilled, but also for medium-skilled and unskilled workers.

Keywords: Mobility; job-to-job; wages; labour market entry; initial conditions (search for similar items in EconPapers)
JEL-codes: E24 J31 J62 J64 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (7)

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Working Paper: Labor Market Entry Conditions, Wages and Job Mobility (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:188

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