Empirical Analysis of the Relationship between Employee Relocation/Transfer and Employee Performance

Author Name SANO Shinpei (Chiba University) / YASUI Kengo (Aoyama Gakuin University) / KUME Koichi (Toyo University) / TSURU Kotaro (Faculty Fellow, RIETI)
Creation Date/NO. March 2019 19-J-020
Research Project Reform of Labor Market Institutions
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In this paper, we analyzed the association between transfer (relocation and transfer) and employee performance indicated through measurements such as wages or promotion, based on micro data for employees provided by RIETI. According to our results, there are wage premiums resulting from both the experience of relocation and of transfer, but they are not statistically different. Both the experience of relocation and of transfer enhance the probability of promotion to management positions. The coefficient of relocation on promotion is greater than of transfer. However, the difference between coefficients of relocation and transfer diminishes as further individual characteristics are included. The number of relocations, especially overseas transfers, enhance both wages and probability of promotion to management positions. Career skills which are associated with employee performance are positively correlated with the experience of relocation. Individuals with better academic records, better attendance records in high school, and greater participation in extra-curricular activity in high school are more likely to experience relocation. On the one hand, these school experiences overlap with employee premiums from relocation, but on the other hand, experience received during relocation has wider effects on employee performance than school-based experience. The experience of relocation improves job satisfaction and the sense of job suitability, but does not enhance overall happiness. An absence of management policy governing relocation tends to result in lower job satisfaction and sense of job suitability and overall happiness. In order to alleviate negative impacts on job satisfaction, the sense of job suitability and overall happiness caused by relocation, our findings suggest that it would be necessary to improve the working environment by promoting communication between employers and employees and adopting diverse employment patterns.