Wages, Mobility and Firm Performance: Advantages and Insights from Using Matched Worker–Firm Data

To illustrate the wide applicability of longitudinal matched employer-employee data, we study the simultaneous determination of worker mobility and wage rates using an econometric model that allows for both individual and firm-level heterogeneity. The model is estimated using longitudinally linked employer–employee data from France. Structural results for mobility show remarkable heterogeneity with both positive and negative duration dependence present in a significant proportion of firms. The average structural returns to seniority are essentially zero, but this result masks enormous heterogeneity with positive seniority returns found in low starting-wage firms. In this article, we reconsider the relation between earnings and mobility using newly developed longitudinal matched employer-employee data. Our research is positioned at the intersection of labour economics and human resource management; however, the techniques we use and the ideas we examine have broad applicability. We develop this idea immediately. Longitudinally linked employer–employee data can be characterised as follows. Labour markets are used as a motivating example. The population frame from which such data are created is a record of all formal jobs in the economy over a specific time