Educational Disparity in Job Mobility: The Great Trend Reversal

Abstract

Making use of the Annual Social and Economic (ASEC) supplement to the Current Population Survey (CPS), I document that the educational gradient in job-to-job mobility exhibits an inverted-‘U’ pattern over the 1970s to the 2010s—the trend reversal occurring around the turn of the millennium. Specifically, an additional year of education is associated with an increase in the annual share of continuously employed job movers by 0.10 percentage points in 1975–1979, by 0.35 percentage points in 1995–1999 and by 0.15 percentage points in 2015–2019. Furthermore, I study the time series through the lens of the canonical (random) on-the-job search model in order to provide a formal economic interpretation. Most notably, I find that there is a similar trend reversal in the effect of education on key efficiency-related model statistics: the contact rate on the job, the number of outside contacts per employment spell or the relative employment at employers with an above-median rank (in, e.g., productivity).

Keywords: job mobility, education, long-run trends, technological change, on-the-job search, search and matching, Fokker–Planck equations, Kolmogorov forward equations, Current Population Survey

JEL Classification: J60, J62, J63, J64, E24, O40, I24, C51