Worker mobility and wage dynamics

Produced as a LEED Research Report for Statistics New Zealand

Matched employer-employee data research has found that workers’ wages are affected by the characteristics of the firms they work in, and that higher skilled workers tend to be employed by higher paying firms.

This paper examines the contribution of workers’ job mobility to their wage dynamics. We focus on the possible trade-off between moving to a better paying firm and losing a firm-tenure specific component of earnings, and examine what types of workers benefit from changing firms, rather than staying with their existing employer.