Effects of Job Mobility on the Unemployment Risk

Arjan Heyma, Jurriaan Prins
SEO Economic Research, The Netherlands

Job mobility is often assumed to increase the employability of individuals. Labour market policy therefore often include measures that stimulate individual job mobility. However, this paper shows that voluntary job mobility has no effect on employability at all, when employability is measured by the individual unemployment risk. At the same time, higher involuntary job mobility in the past is significantly correlated with a higher unemployment risk, which may point at correlation between low employability in the past and present. The potential bias of this reversed causality is reduced by including unique information on individual employability levels from a long time panel survey, covering more than 20 years of individual labour market histories, and by accounting for unobserved heterogeneity in employability levels. This paper is the first to model the effect of job mobility on the unemployment risk instead of the other way around. It thus makes an important contribution to the political discussion concerning job mobility and the need for a flexible labour force.

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