Job Mobility in 1990s Britain: Does Gender Matter? * Alison L Booth and Marco Francesconi Institute for Social and Economic Research University of Essex Wivenhoe Park Colchester CO4 3SQ England Tel.: 44-1206-873087 Fax: 44-1206-873151 e-mail: [email protected]Institute for Social and Economic Research University of Essex Wivenhoe Park Colchester CO4 3SQ England Tel.: 44-1206-873534 Fax: 44-1206-873151 e-mail: [email protected]Title as Running Head: Job Mobility in 1990s Britain: Does Gender Matter? Abstract The paper examines gender differences in intra-firm and inter-firm job changes, including worker-initiated and firm-initiated separations, for white full-time British workers over the period 1991-96. We document four main findings. First, job mobility is high for both men and women, with more than one quarter of the sample changing job each year. Second, the distinction between promotions, quits and layoffs is important, suggesting that studies that either aggregate worker-initiated and firm-initiated separations or neglect within-firm mobility may provide an inappropriate picture of career mobility. Third, we find that the average male and female quit and promotion probabilities are remarkably similar, but there are significant gender differences in layoff probabilities. Fourth, we find significant gender differences in the impact of variables such as union coverage, occupation and presence of young children. First version, January 1999 This version, September 1999 JEL Classification: J24, J41, J62 Keywords: Career mobility, gender, promotions, quits, layoffs * The support of the Economic and Social Research Council under Award No. L212252007 is gratefully acknowledged. Views expressed here are those of the authors and not necessarily those of the ESRC. We are grateful to an anonymous referee, Joe Altonji, Anne Preston, and seminar participants at the University of Amsterdam, University of Essex, and the American Economic Association meetings 1999 (New York) for useful comments, and to Jeff Frank for stimulating discussion.
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Job Mobility in 1990s Britain: Does Gender Matter? *
Alison L Booth and Marco FrancesconiInstitute for Social and Economic Research
Title as Running Head: Job Mobility in 1990s Britain: Does Gender Matter?
AbstractThe paper examines gender differences in intra-firm and inter-firm job changes, includingworker-initiated and firm-initiated separations, for white full-time British workers over theperiod 1991-96. We document four main findings. First, job mobility is high for both men andwomen, with more than one quarter of the sample changing job each year. Second, thedistinction between promotions, quits and layoffs is important, suggesting that studies thateither aggregate worker-initiated and firm-initiated separations or neglect within-firm mobilitymay provide an inappropriate picture of career mobility. Third, we find that the average maleand female quit and promotion probabilities are remarkably similar, but there are significantgender differences in layoff probabilities. Fourth, we find significant gender differences in theimpact of variables such as union coverage, occupation and presence of young children.
First version, January 1999This version, September 1999
* The support of the Economic and Social Research Council under Award No. L212252007 is gratefullyacknowledged. Views expressed here are those of the authors and not necessarily those of the ESRC. We aregrateful to an anonymous referee, Joe Altonji, Anne Preston, and seminar participants at the University ofAmsterdam, University of Essex, and the American Economic Association meetings 1999 (New York) for usefulcomments, and to Jeff Frank for stimulating discussion.
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NON-TECHNICAL SUMMARY
It is well-known that women workers have a lower attachment to the labour force than men,with potentially important consequences for human capital accumulation, job mobility andoccupational segregation by gender. But are men more likely than women to be promoted?How do career patterns differ by gender for workers who are strongly attached to the labourmarket? Does distinguishing between intra-firm and inter-firm job changes improve ourunderstanding of gender differences in mobility? We address these questions using a sampleof workers from the British Household Panel Survey (BHPS), collected annually over theperiod 1991-1996. This sample comprises only full-time workers, and excludes from theanalysis job-to-nonemployment transitions. Our data allow career (or job-to-job) mobility tobe disaggregated into job changes involving a promotion within a firm and job changesinvolving movements across firms. With this disaggregation, the paper extends previous workin two directions. First, it distinguishes between internal and external job mobility, which hasnot been possible before using other British survey data. Second, within the career mobilityliterature, it extends the approach of most US empirical research by distinguishing betweenworker-initiated (quits) and firm-initiated (layoffs) job changes across firms.
We find that, although women’s promotion and quit rates are higher than men’s in theraw data, such differences vanish once we control for standard individual and jobcharacteristics. This contrasts with the popular view that women quit more often and arepromoted less frequently than men. However, women’s layoff rates remain significantlyhigher than men’s. Our results also demonstrate that, although average job mobility rates ofmen and women in the sample are similar, the rates do respond differently to specific changesin their socio-economic environment. These findings emphasise the importance ofdistinguishing between different forms of job mobility. The turnover effects of certainvariables, such as the presence of young children, union coverage and occupation, differsignificantly by gender across all forms of job mobility. Thus, even with a reasonablyhomogenous sample of workers, as long as women’s and men’s career patterns differ in termsof their response to changes in individual or job-specific characteristics, analyses that focussimply on the overall separation rate and neglect intra-firm mobility may provide anincomplete picture of workers’ career development and reach potentially misleadingconclusions.
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1. Introduction
Job mobility is a striking feature of the British labour market in the 1990s. According
to new longitudinal data, each year more than a quarter of full-time workers can expect to
change job, and another quarter will move again one year later. Yet relatively little is known
about the incidence of various forms of mobility within and across firms and how they differ
by gender. Are men more likely than women to be promoted? What are the major
determinants of job changes for men and women? It is well-known that women workers have
a lower attachment to the labour force than men, with potentially important consequences for
human capital accumulation, job mobility and occupational segregation by gender (Mincer
and Ofek, 1982; Royalty, 1998). But how do career patterns differ by gender for workers who
are strongly attached to the labour market? Does distinguishing between intra-firm and inter-
firm job changes improve our understanding of gender differences in mobility? We address
these questions using a sample of workers from the British Household Panel Survey (BHPS),
collected annually over the period 1991-1996. This sample comprises only full-time workers,
and excludes from the analysis job-to-nonemployment transitions.
Our data allow career (or job-to-job) mobility to be disaggregated into job changes
involving a promotion within a firm and job changes involving movements across firms. With
this disaggregation, the paper extends previous work in two directions. First, it distinguishes
between internal and external job mobility, which has not been possible before using other
British survey data.1 This distinction is important, because promotions are an integral part of
workers’ careers (Gibbons, 1998; Gibbons and Waldman, 1999; and references therein).
Second, within the career mobility literature, it extends the approach of most US empirical
research by distinguishing between worker-initiated (quits) and firm-initiated (layoffs) job
changes across firms (Sicherman and Galor, 1990; McCue, 1996). This distinction is
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important when there are informational asymmetries and costly renegotiation between workers
and firms (Hall and Lazear, 1984).
2. Background
Why do workers change job? From the supply side, workers leave their job (to a
different employer or another job at the same employer) if the expected utility from so doing
exceeds current utility less the costs of the change. To the extent that men and women differ in
alternative opportunities and costs, there may be gender differences in job mobility. Voluntary
job separation behaviour has been addressed most frequently in the context of human capital
and job-matching theory (see among others Oi, 1962; McLaughlin, 1991; Harper, 1995).
Gender implications for career mobility can be obtained from these models if there are (i)
differences in male and female human capital acquisition that make men or women less highly
valued by a firm (Blau and Kahn, 1981); or (ii) gender differences in job search costs
(Meitzen, 1986); or (iii) differences in employers’ monopsony power, which arise if there is
gender discrimination in hiring so that women must search for a gender match as well as the
usual job match (Neumark, 1988).
From the demand side, firms will terminate a job if the profits from so doing exceed
expected profits from continuation, less any redundancy costs. Permanent exogenous shocks
(through, for example, technical and structural change rendering skills obsolete) reduce
expected profits by lowering marginal productivity. Nominal wages in Britain are typically
downwardly rigid, and hence demand shocks may induce layoffs. To the extent that there is
occupational or industrial segregation or sex-typing, women and men may be subject to
differential demand shocks. Moreover, employers will want to dismiss a worker if the match
quality is poor. Although the scope for dismissal may be circumscribed by labour laws,
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dismissals may be packaged as redundancies for which there is a statutory procedure in
Britain. If employers follow different strategies in their attempts to retain men and women
(through promotions, wages and/or bonuses, targeted redundancy pay), there may be gender
differences in involuntary job separation behaviour.
The last fifteen years have witnessed a remarkable growth of studies of the
organisation of labour within firms (for recent surveys, see Gibbons, 1996, and Gibbons and
Waldman 1999). However, we currently have little systematic knowledge of the contribution
of promotions to career mobility, and even less knowledge of sources of gender differences in
career mobility after accounting for promotions.2 Firms’ promotion policies are a means of
increasing productivity within an organisation by increasing human capital acquisition,
increasing effort, of inducing separating equilibria in terms of worker types (Chang and Wang,
1995), or even of constraining favouritism (Prendergast and Topel, 1996). Firms may
backload compensation to elicit higher levels of effort, where effort may be proxied by hours
of overtime work (Landers et al., 1996). If women are constrained by family factors from
working long hours, this may lead to gender differences in promotion rates. There may also be
gender differences in the way family responsibilities affect promotion and mobility; if women
are more likely to quit, firms will be less likely to train and promote them. On the other hand,
if women view promotion as unlikely due to discriminatory promotion practices, they may be
less prone to put themselves forward for training programmes at the firm.
Gender differences in job mobility rates are not only interesting in their own right, but
may also suggest explanations of the gender pay gap. If, for example, women are more likely
to quit their jobs than men, firms will be less willing to invest in their training, resulting in
lower accumulation of human capital and ultimately lower rates of pay. Alternatively, if
women are more likely to receive a promotion, and large wage jumps are observed upon
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promotion, we may expect promotions to play an important role in reducing gender wage
differentials.3
3. The data
The data are from the first six waves of the British Household Panel Survey (BHPS), a
nationally representative survey collected annually since 1991. The BHPS provides
information on the timing and type of job changes, including job changes at the same
employer. For all jobs ending during the 12-month period between interviews, workers give
the reason for stopping a job. Therefore we can identify job changes involving promotion (a
change of duties or different job spell at the one employer), movement across employers, and
other forms of job termination. We define a firm-initiated separation or layoff as when a
worker is either made redundant or dismissed, or when a temporary job is terminated. All
other movements across employers are defined as worker-initiated separations.4
Our estimating sample comprises white men and women who: (i) were born after
1936; (ii) reported full interviews; (iii) have at least two years of labour market data; (iv) were
in full-time employment at the time of the survey; and (v) were not self-employed, farmers, or
in the armed forces. These restrictions primarily imposed to narrow the sample to those with
a reasonably strong attachment to the labour market yield an unbalanced panel comprising
2,135 men and 1,475 women, with 9,697 and 6,210 person-year observations, respectively.5
At the bottom of Tables 1 and 2, we show the distributions of the male and female
samples by career states (the omitted state is staying with the same employer without
promotion). For this sample of workers, the mobility rates by gender are very similar, with
women being slightly (but significantly) more mobile over the sample period. About 12% of
female person-year observations and 10.4% of male person-year observations were promoted
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within the firm, while another 15-16% were observed to move across firms. Some 9.5% of
women and just less than 9% of men quit voluntarily, while 7% and 6.3% of women and men
respectively were laid-off layoffs. Thus we find evidence of considerable job mobility over the
sample period, but gender differences are quantitatively small.
The last columns of Tables 1 and 2 show the sample means of the variables used in the
multivariate analysis to follow. Men have greater work experience and job tenure than
women, work longer hours, are more concentrated in skilled-manual and managerial
occupations, and in the private sector, and have more dependent children. But a larger fraction
of women than men with dependent children are out of the labour force or in part-time jobs,
and thus would not be included in our sample.
4. Results
The first three columns of Tables 1 and 2 report the coefficients (and robust standard
errors)6 of a multinomial logit (MNL) regression for men and women, respectively. The
Tables report the results for the mutually exclusive states of “promotion”, “quit”, and “layoff”,
relative to the base of “staying” in the same job with the same employer. The explanatory
variables include: tenure in the current job and its square, labour market experience and its
Observed proportion by state (%) 10.37 8.88 6.31Number of observations 9697Note: Estimated coefficients are relative to the state of staying with the same employer without promotion.
Standard errors are shown in parentheses.* significant at 0.1 level** significant at 0.05 level*** significant at 0.01 level
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Table 2: Multinomial Logit Estimates of Job Mobility, Women
Types of Job Mobility
Variables Promotion Quit Layoff Means
O level -0.259 0.040 -0.019 0.421(0.160) (0.161) (0.169)
A level 0.038 0.305 -0.227 0.176(0.178) (0.184) (0.211)
Observed proportion by state (%) 11.87 9.47 6.99Number of observations 6210Note: Estimated coefficients are relative to the state of staying with the same employer without promotion.
Standard errors are shown in parentheses.* significant at 0.1 level** significant at 0.05 level*** significant at 0.01 level
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Table 3: Predicted Probability Distributions of Job Mobility, by Gender and SelectedCharacteristics
Note: Predicted probabilities are obtained from pooled (men and women) MNL estimates with full set ofinteractions, equivalent to those reported in Tables 1 and 2. ∆(%) is the percentage change of thefemale predicted probability with respect to the male predicted probability relative to the female rate.See text for detailed explanation and example. Baseline values are computed at sample values.* 0.05 < p < 0.10** 0.01 < p < 0.05*** p < 0.01