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black women, black men, and then white women. These results are inconsistent with two
views often expressed. (1) All low wage workers are not stuck in dead end jobs. High
school dropouts whose parents have low income experience about the same amount of wage
growth as other groups. (2) Work experience is not a magic bullet. The same evidence
indicates that low skill workers will not have huge wage gains from work experience. There
is no reason to believe that forcing to them to work will lead to a noticeable effect on the
poverty rate.
We also looked at the effects of job turnover on wage progression for low skilled work-
ers. The results here suggest that there is a positive return to some mobility. High school
dropouts who change jobs once a year experience on average 3.4 percent higher wage growth
in those years. In contrast, a second job change in a calendar year is not associated with
additional wage growth. Furthermore, involuntary job changes lead to declines in wages.
These results do not vary substantially with measures of family background. This infor-
mation is important to keep in mind when considering welfare programs and internships.
In terms of generating wage growth, it is productive to keep workers attached to the labor
force so that they can receive the benefits of experience. However, it is also important to
allow flexibility in choosing positions. A substantial amount of lifecycle wage growth comes
with job changes so workers should not be discouraged from seeking new employers.
If our goal is to find policies that stimulate wage growth, this work suggests that: (1)
We should encourage low skilled workers to work. Work experience does appear to lead
to moderate amounts of wage growth even for low skilled workers. (2) We should try to
keep low skill workers from being laid off. This is obvious in terms of the direct effect on
the level of earnings, but it is also true in terms of wage growth. (3) We should encourage
workers to shop for better jobs since a substantial amount of wage growth occurs at job
changes. While none of these points are particularly surprising, it is important to document
the magnitude of these effects for low skilled workers. The mechanisms of precisely how to
design policies that maximize wage growth and precisely what the predicted impacts will
be is an important topic for future research.
20
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"ocrText": "JUL-03-2000 12:21\nOMB DEP DIR MGMT\n202 395 6974 P.24/37\nblack women, black men, and then white women. These results are inconsistent with two\nviews often expressed. (1) All low wage workers are not stuck in dead end jobs. High\nschool dropouts whose parents have low income experience about the same amount of wage\ngrowth as other groups. (2) Work experience is not a magic bullet. The same evidence\nindicates that low skill workers will not have huge wage gains from work experience. There\nis no reason to believe that forcing to them to work will lead to a noticeable effect on the\npoverty rate.\nWe also looked at the effects of job turnover on wage progression for low skilled work-\ners. The results here suggest that there is a positive return to some mobility. High school\ndropouts who change jobs once a year experience on average 3.4 percent higher wage growth\nin those years. In contrast, a second job change in a calendar year is not associated with\nadditional wage growth. Furthermore, involuntary job changes lead to declines in wages.\nThese results do not vary substantially with measures of family background. This infor-\nmation is important to keep in mind when considering welfare programs and internships.\nIn terms of generating wage growth, it is productive to keep workers attached to the labor\nforce so that they can receive the benefits of experience. However, it is also important to\nallow flexibility in choosing positions. A substantial amount of lifecycle wage growth comes\nwith job changes so workers should not be discouraged from seeking new employers.\nIf our goal is to find policies that stimulate wage growth, this work suggests that: (1)\nWe should encourage low skilled workers to work. Work experience does appear to lead\nto moderate amounts of wage growth even for low skilled workers. (2) We should try to\nkeep low skill workers from being laid off. This is obvious in terms of the direct effect on\nthe level of earnings, but it is also true in terms of wage growth. (3) We should encourage\nworkers to shop for better jobs since a substantial amount of wage growth occurs at job\nchanges. While none of these points are particularly surprising, it is important to document\nthe magnitude of these effects for low skilled workers. The mechanisms of precisely how to\ndesign policies that maximize wage growth and precisely what the predicted impacts will\nbe is an important topic for future research.\n20"
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