Inter-Firm Job Mobility for Wage Growth
In developing urban economies, remaining in a single entry-level job rarely yields substantial wage growth, requiring young workers to navigate inter-firm job switches to secure higher pay.
Picture this
Imagine climbing a ladder where each rung is in a different building—to reach higher floors, a climber cannot stay on the same ladder forever; they must use their proven track record to jump to higher-paying rungs at new companies.
What the evidence says
Only 13% of workers remained in the same job after 3 years; treated workers leveraged early job security and certified signals to switch firms successfully, sustaining a 20% wage premium over control workers (p < 0.05) without working longer current job tenures.
- Who
- N = 1,383 employed youth participants (aged 18–29) followed up 4 years post-treatment in Addis Ababa, Ethiopia.
- How
- Longitudinal panel tracking job retention, inter-firm switches, and wage growth between 2015 and 2018 endlines.
What to do
Encourage early career job mobility and credential portability so young workers can leverage market switches rather than relying solely on internal firm promotions.
From the source
"Only about 13 percent of workers hold the same job that they had at the first endline, three years before. Further, treated workers have not been employed in their current job for longer than control workers... These findings underscore the importance of job mobility for wage growth"
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