Who Moves Up the Job Ladder?

56 Pages Posted: 21 Aug 2017

See all articles by John Haltiwanger

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Henry R. Hyatt

U.S. Census Bureau - Center for Economic Studies

Erika McEntarfer

U.S. Census Bureau

Date Written: August 2017

Abstract

In this paper, we use linked employer-employee data to study the reallocation of heterogeneous workers between heterogeneous firms. We build on recent evidence of a cyclical job ladder that reallocates workers from low productivity to high productivity firms through job-to-job moves. In this paper we turn to the question of who moves up this job ladder, and the implications for worker sorting across firms. Not surprisingly, we find that job-to-job moves reallocate younger workers disproportionately from less productive to more productive firms. More surprisingly, especially in the context of the recent literature on assortative matching with on-the-job search, we find that job-to-job moves disproportionately reallocate less-educated workers up the job ladder. This finding holds even though we find that more educated workers are more likely to work with more productive firms. We find that while more educated workers are less likely to match to low productivity firms, they are even less likely to separate from them, with less educated workers both more likely to separate to a better employer in expansions and to be shaken off the ladder (separate to nonemployment) in contractions. Our findings underscore the cyclical role job-to-job moves play in matching workers to higher productivity and better paying employers.

Suggested Citation

Haltiwanger, John C. and Hyatt, Henry R. and McEntarfer, Erika, Who Moves Up the Job Ladder? (August 2017). NBER Working Paper No. w23693. Available at SSRN: https://ssrn.com/abstract=3023093

John C. Haltiwanger (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3504 (Phone)
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National Bureau of Economic Research (NBER) ( email )

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Institute for the Study of Labor (IZA) ( email )

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Henry R. Hyatt

U.S. Census Bureau - Center for Economic Studies ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Erika McEntarfer

U.S. Census Bureau ( email )

4600 Silver Hill Road
Washington, DC 20233
United States

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