Job Mobility and Sorting: Theory and Evidence
29 Pages Posted: 25 Jul 2015 Last revised: 10 Aug 2018
Date Written: July 17, 2018
Relying on the canonical (random) on-the-job search model, I study the risk ratio of job-to-job transitions to separations into unemployment as a measure of a person’s ability to sort into preferred jobs. I show that this measure possesses various desirable features. Making use of the Survey of Income and Program Participation, I investigate the determinants of the risk ratio of job-to-job transitions to separations into unemployment. Formal education tends to be positively correlated with this risk ratio. General experience and accumulated occupation-specific human capital substantially reduce both job-to-job transitions and separations into unemployment, leaving the risk ratio, however, mostly unaffected. In contrast, the data suggests that human capital concepts that take into account the multidimensionality of skills play a prominent role.
Keywords: gross worker flows, job mobility, employer-employer transitions, unemployment, sorting, education, human capital, versatility, SIPP
JEL Classification: J62, J24, I24, I26
Suggested Citation: Suggested Citation