Job Mobility and Gender-Based Wage Growth Differentials

By Keith, Kristen; McWilliams, Abagail | Economic Inquiry, April 1997 | Go to article overview

Job Mobility and Gender-Based Wage Growth Differentials


Keith, Kristen, McWilliams, Abagail, Economic Inquiry


I. INTRODUCTION

Evidence presented by Goldin [1989], O'Neill [1985] and others shows that the gender wage gap is narrowing. Much of the narrowing has been attributed to changes in female employment behavior such as the increased consistency of labor force participation and investment in education. However, because wages are not yet equal, questions remain. For example, does mobility play a role in the remaining wage gap? In this paper we examine the role of mobility, because this has been a relatively neglected area of interest for researchers concerned about the gender wage gap.

Some evidence on gender differences in mobility and the returns to mobility has been presented, but there is little consistency in the reported evidence. Keith and McWilliams [1995] demonstrate that the mobility histories of young men and women differ significantly. Loprest [1992] reports that, for a sample of individuals who worked full time for four consecutive years, young men's wages grew twice as much when they changed jobs (i.e., employers) as young women's did. However, Abbott and Beach [1994] find that the wage effects of mobility for women are similar in magnitude to the gains that Mincer [1986] and Holmlund [1984] find for men. Given the sometimes conflicting results reported so far, determining the extent and the cause of gender differences in wage-mobility effects has important implications for gender wage gap arguments.

In this study we examine the patterns and the returns to mobility for young men and women. To examine mobility patterns we disaggregate mobility into involuntary, or employer-initiated, and voluntary, or employee-initiated, separations. We further disaggregate involuntary separations into layoffs and discharges and we further disaggregate voluntary separations into family-related and non-family-related quits. By examining the impact of each of these different types of job separation on wage growth, and the difference in the relative frequency of each type of separation for men and women, we can make inferences about the impact of early career mobility on the gender wage gap.

The remainder of this paper is organized as follows. In section II we review evidence on the returns to different types of mobility. In section III we present evidence on gender differences in mobility and wage growth. We use data from the National Longitudinal Survey of Youth (NLSY) to examine the mobility patterns of men and women and to calculate average wages and average wage growth. In section IV we describe how we selected a sample and specified a model for estimating the determinants of wage growth. In section V we examine the wage growth effects of different types of mobility, controlling for starting wages and individuals' fixed effects. In section VI, we discuss our conclusions.

II. THE RETURNS TO DIFFERENT TYPES OF MOBILITY

Workers change jobs for different reasons, some voluntary and some involuntary. There is some evidence that the returns to different types of mobility differ. Not surprisingly, there is consistent evidence that employee-initiated separations (quits) increase wage growth, and that employer-initiated separations (layoffs and discharges) decrease wage growth, relative to staying with the same employer.(1) Additional evidence on the job mobility and wage growth of men has been offered as well. Bartel and Borjas [1981] show that job-related quits have a larger positive impact on wage growth than do non-job-related quits, with the highest wage growth resulting from those quits that are associated with successful job shopping. Parsons [1989] shows that, for young men, an employer-initiated separation with prejudice (a discharge) results in a larger wage penalty than an employer-initiated separation without prejudice (a layoff). Keith [1993] and Keith and McWilliams [1995] show that the number of previous discharges decreases, and the number of previous job-related quits increases, the current wage for samples of young men. …

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