Trends and Cycles in U.S. Job Mobility

Abstract

Recent studies document a decline in U.S. labor-market fluidity from as early as the 1970s on. Making use of the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS), I uncover a pronounced increase in job-to-job mobility from the 1970s to the 1990s, i.e., the annual share of continuously employed job-to-job movers rises from 5.9 percent of the labor force in 1975–1979 to 8.8 percent in 1995–1999. Job-to-job mobility exhibits a downward trend only since the turn of the millennium. In order to provide a formal economic interpretation, I additionally estimate the parameters of the random on-the-job search model. Furthermore, I document that job-to-job mobility has an unconditional correlation of −0.86 with the unemployment rate at business-cycle frequencies in 1975–2017, varying by around three percentage points over the business cycle.

Keywords: job mobility, long-run trends, economic fluctuations, business cycles, productive efficiency, search and matching, on-the-job search, Fokker–Planck equation, Kolmogorov forward equation, Current Population Survey

JEL Classification: J62, E32, C51