The impact of job mobility on earnings: using occupational and industrial classifications to identify job changes

According to the Bureau of Labor Statistics, the median number of years that a US worker has been with their current employer is 4.4 years. Although many job changes may not be classified as ‘career changes,’ any type of job change may have an impact on a person’s future earnings. In the present study, the following three types of job changes are examined in order to determine which ones result in higher incomes: a change in occupational status; a change in industry; or a change in both. Using data from the National Longitudinal Survey of Youth (NLSY), a log-linear wage regression with a correction for self-selection is estimated. Results suggest that changing jobs within the same industry or within the same occupation both increase a person’s income. However, a job change that is characterized by both a change in industry and occupation reduces a person’s income. The present study is one of the few studies to examine the effects of job mobility on earnings when mobility is defined in the context of changes in occupational and/or industrial classification.