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Article: Wage and employer changes over the life cycle.
- Article from:
- Economic Commentary (Cleveland)
- Article date:
- April 15, 2004
- Author:
CopyrightCOPYRIGHT 2004 Federal Reserve Bank of Cleveland. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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When people change employers, they often take a pay cut. It should come as no surprise that most people would prefer not to reduce their wages when they change jobs, but sometimes they have no choice. If someone is fired and forced to seek a new employer, for example, a wage decline might reflect the worker's poor performance and dismissal from the previous job. To the extent that potential new jobs require references from previous jobs, wages in the new job may be lower.
But many of those switching to lower-paying jobs appear to accept the lower wage voluntarily. One reason a person might do so is that the new job offers the possibility of higher wages in the ...