The recent decline in worker mobility

Nellie L. Zhao, Cornell University

Using the Longitudinal Employer-Household Dynamics (LEHD) infrastructure files developed and maintained by the U.S. Census Bureau, I analyze recent trends in worker mobility by focusing on the accessions and separations of workers. The matched structure of LEHD allows me to decompose total separations into separations to another employer and separations to nonemployment. Total accessions can be decomposed in a similar fashion. One striking feature of the data is that while the movement of workers to and from unemployment has not changed drastically over the last two decades, this is not the case for the movement of workers between employers. In particular, I find evidence in line with the literature that, since the mid-1990s, the United States labor market has seen a secular decline in worker mobility that accelerates during downturns. The concern is that workers who rely heavily on on-the-job search to improve match quality may now find it increasingly more difficult to find, let alone climb, this job ladder. Therefore, to better understand the causes of this decline in mobility, I analyze the hazard function of the two types of separations across a wide set of worker and firm characteristics. I find that this decline in mobility has been concentrated among young, low-skilled, and low-to-middle income individuals.