Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305701 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17259
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Wage mobility reduces the persistence of wage inequality. We develop a framework to quantify the contribution of employer-to-employer movers to aggregate wage mobility. Using three decades of German social security data, we find that inequality increased while aggregate wage mobility decreased. Employer-to-employer movers exhibit higher wage mobility, mainly due to changes in employer wage premia at job change. The massive structural changes following German unification temporarily led to a high number of movers, which in turn boosted aggregate wage mobility. Wage mobility is much lower at the bottom of the wage distribution, and the decline in aggregate wage mobility since the 1980s is concentrated there. The overall decline can be mostly attributed to a reduction in wage mobility per mover, which is due to a compositional shift toward lower-wage movers.
Subjects: 
wage mobility
wage inequality
wage premiums
inequality persistence
employer changes
german linked-employer-employee data
business dynamism
JEL: 
J30
J31
J62
D63
Document Type: 
Working Paper

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