A New Explanation for Job-Tenure Effects on Short-Term Mobility Wage Gains. An Application to the Italian Case

PANIGO, DEMIAN TUPAC; VALDES, ISABELLE; NATICCHIONI, PAOLO

Palma de Mallorca

Otro; II Mediterranean Summer School in Theoretical and Applied Economics: The Evaluation of Public Policies; 2003

UNIVERSITAT DE LES ILLES BALEARS

The main goal of this paper is to analyze theoretical and empirical links between job-tenure and short-term mobility wage gains (MWG, the difference between the first wage in the new job and the last wage in previous position). Standard theoretical approaches examining this subject (search theory, job-matching and on-the-job training models) predict a negative correlation for those variables. Furthermore, this result has been confirmed in different applied research such as Gottschalk (2001) or Buchinsky et al. (2001). On the contrary we develop a simplified model where optimal switching condition determines a positive correlation between short-term mobility wage gains and current job-tenure. The main result derived from our model appears to be confirmed for the Italian case. Using a panel data set we find out that short-term mobility wage gains are non linear and positively correlated with job-tenure at least up-to 10 years of previous job-tenure