The Korean Journal of Economic Studies
Can Job Turnover Help Young Korean Workers Climb the Wage Ladder?
Taehee Oh (Bank of Korea) and Jangyoun Lee (Incheon National University)Year 2022Vol. 70No. 3
This paper studies the effect of job turnover on wage growth for young Korean workers using the Youth Panel over the period of 2007-2019. Our empirical findings highlight that if a young employee whose work experience is less than three years moves a job voluntarily, the hourly wage increases by 3.3-4.0 percent, and the annual rate of wage growth increases by 0.1-0.8 percentage point (the so-called “wage-ladder effect”). These results imply that job turnover of young Korean employees not only alleviates labor market mismatch, but also contributes to improve human capital formation by helping them find more suitable jobs and boost their job performance.