Varieties of Wage Mobility in Early Career in Europe

This article investigates the relationship between job mobility and wage mobility for salaried workers at the beginning of the employment career in eight European countries. While job-to-job mobility is associated with positive rewards, there are competing theories for job mobility via unemployment. Search and matching models predict that an unemployment phase might result in positive rewards. In contrast, signalling and human capital theories predict a negative impact of unemployment on future wages. Our results indicate that the validity of theoretical concepts is largely dependent on the institutional context. Job mobility via unemployment yields high rewards for job movers in Ireland and the United Kingdom and to a lesser degree in Southern Europe, but negative outcomes in Austria and Germany. In contrast, job-to-job mobility rewards job movers with positive outcomes in all countries, though to a lesser extent in southern European countries. Search and matching models are therefore more appropriate for predicting outcomes in countries of liberal regime, while signalling and human capital models yield better predictions in countries with stricter employment legislation and tighter occupational boundaries. In southern European countries, the insider&-outsider fragmentation of the labour market impairs predictive power of both theories.

Varieties of Wage Mobility in Early Career in Europe Articles