Abstract

This paper studies the sources of wage growth and the process of turnover for a sample of Italian male workers employed in the private sector. Different theories based on the idea of job-specific skill investment are tested and discussed. Results indicate a consistent proportion of wage cuts upon moving to a new job and some evidence of positive duration dependence in reservation wages. This suggests the importance of matching and human capital components in wage determination. However, mobility patterns and wage dynamics can hardly be explained by a single model; each model is instead only able alone to capture some stylised facts. Heterogeneity in mobility rates plays also an important role.