There is a large literature which documents a significant increase in wage inequality from 1980 to 2000 (Katz & Autor, 1999). The growth in wage gap between high school and college graduates has been particularly large, at 21%. Since wage income is a large contributor to a householdks economic well being, it is tempting to view income inequality as a measure of welfare inequality. During this time period, there has been sharp changes in the relative distribution of college graduates and lower skill workers across metropolitan areas in the US. For example, the share of the working population living in Boston who have a college degree has increased 17 percentage points during this 30 year time span.
In the fall of 2008, world financial markets were in the midst of a credit crisis of historic breadth and depth. In this paper, we provide a unique perspective of the impact of the crisis on the real decisions made by corporations in the United States, Europe, and Asia. While the crisis is dramatic and unfortunate, it provides an opportunity to study how financial constraints impact corporate behavior.
Job mobility has traditionally served as a primary adjustment process for workers and employers. The economic conditions affecting job mobility decisions range from discretionary choice factors such as a desire for better pay, working conditions, and opportunities for advancement to exogenous factors beyond the control of workers for example, plant relocations and shutdowns, recessionary or structural declines in the demand for labor, and technological change. This distinction between mobility emulating from discretionary factors and mobility resulting from exogenous changes suggests that in analyzing job changing behavior, it is useful to separate workers into three groups: voluntary movers, involuntary movers, and stayers.
Analysis of determinants of the job changing behavior of members of the first two groups is important in gaining a better understanding of worker mobility and labor market flexibility. For example, worker response to wage differences between current jobs and potential alternative jobs helps determine whether such differences serve as an efficient labor supply adjustment mechanism. A related concern is the role of specific and general human capital on job moves and wages.
