Wage Mobility within and between Jobs

This paper presents evidence on the extent of wage mobility both while working for the same firm and when moving to a new firm. We find that mean wage growth between jobs is large in comparison to wage growth while working for the same employer, especially for less educated workers who experience low mean wage growth between jobs but even lower wage growth while working for the same employer. There is, however, substantial heterogeneity in wage growth both within and between firms. We, therefore, focus on both the means of the wage change distributions and on the probability that a worker does not experience real wage growth either while working for the same employer or moving to a new employer. We find that while real wages do grow with experience on the average job, a substantial proportion of workers experience real declines in wages while working for the same employer or moving to a new employer. 1 Economics Department, Boston College, Chestnut Hill, Massachusetts 02467. Helen Connolly provided outstanding assistance on this data intensive project.