Changing Stability in U.S. Employment Relationships: A Tale of Two Tails

52 Pages Posted: 28 Jan 2020

See all articles by Raven Molloy

Raven Molloy

Board of Governors of the Federal Reserve System

Christopher L. Smith

Board of Governors of the Federal Reserve System

Abigail Wozniak

Federal Reserve Banks - Federal Reserve Bank of Minneapolis; IZA Institute of Labor Economics

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Date Written: January 2020

Abstract

We confront two seemingly-contradictory observations about the US labor market: the rate at which workers change employers has declined since the 1980s, yet there is a commonly expressed view that long-term employment relationships are more difficult to attain. We reconcile these observations by examining how the distribution of employment tenure has changed in aggregate and for various demographic groups. We show that the fraction of workers with short tenure (less than a year) has been falling since the 1980s, consistent with the decline in job changing. Meanwhile, the fraction of workers with long tenure (20 years or more) has been rising modestly owing to an increase in long tenure for women and the ageing of the population. Long tenure has declined markedly among older men; this trend may have spurred popular perceptions that long-term employment is less common than in the past. The decline in long-tenure for men appears due to an increase in mid-career separations that reduce the likelihood of reaching long-tenure, rather than an increase in late-career separations. Nevertheless, survey evidence indicates that these changes in employment relationships are not associated with heightened concerns about job insecurity or decreases in job satisfaction as reported by workers. The decline in short-tenure is widespread, associated with fewer workers cycling among briefly-held jobs, and coincides with an increase in perceived job security among short tenure workers.

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Suggested Citation

Molloy, Raven and Smith, Christopher L. and Wozniak, Abigail, Changing Stability in U.S. Employment Relationships: A Tale of Two Tails (January 2020). NBER Working Paper No. w26694, Available at SSRN: https://ssrn.com/abstract=3525935

Raven Molloy (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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Christopher L. Smith

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Abigail Wozniak

Federal Reserve Banks - Federal Reserve Bank of Minneapolis ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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