ILR Impact Brief - Industry Clusters Affect Job Mobility and Earnings Growth
[Excerpt] Industry clusters are associated with greater job hopping and faster growth in workers’ earning power relative to the experience of workers at less spatially concentrated companies. Workers in these clusters tend to accept lower starting salaries than peers at more isolated firms in anticipation of rapid gains that accompany movement from job to job within the cluster and the accumulation of industry-specific knowledge. Higher earnings observed among workers in clustered firms may also reflect choices made by workers with certain characteristics to seek employment in an area with a high concentration of similar firms and by companies with certain characteristics to locate in such an area.
The ILR Impact Brief series highlights the research and project based work conducted by ILR faculty that is relevant to workplace issues and public policy. The Briefs are prepared by Maralyn Edid, Senior Extension Associate, ILR School.
job mobility; earnings growth; industry clusters; employment; labor market
For a more in-depth analysis, please see: Freedman, M. L. (Forthcoming). Job hopping, earnings dynamics, and industrial agglomeration in the software publishing industry. Journal of Urban Economics.
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