This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

« Back to Results

Resolving Puzzles and Contradictions in Job Tenure Trends

Paper Session

Saturday, Jan. 6, 2018 8:00 AM - 10:00 AM

Pennsylvania Convention Center, 111-A
Hosted By: American Economic Association
  • Chair: Betsey Stevenson, University of Michigan

Aggregate Labor Market Fluidity

Henry R. Hyatt
,
U.S. Census Bureau
Kristin Sandusky
,
U.S. Census Bureau

Abstract

Household surveys and administrative records data tell different stories about employment reallocation in recent decades. While household surveys show little, if any, trend in employment reallocation over the last forty years or more, measured either via job changing or the job tenure distribution, the rate of employer business entry declined, as did employment reallocation rates across employer businesses. In this paper, we consider the implications of the dramatic increase in non-employer businesses for the long-run pattern of employment reallocation. The self-employment of non-employer businesses owners is highly unstable and so its increase offsets at least some of the decline in employment reallocation for employer businesses. Our paper assesses the extent to which accounting for reallocation of workers into and from self-employment reconciles the apparently divergent long-run trends in survey and administrative records sources.

Reconciling the Decline in Job Changing With Trends in Employment Tenure

Raven Molloy
,
Federal Reserve Board
Christopher Smith
,
Federal Reserve Board
Abigail Wozniak
,
University of Notre Dame

Abstract

We confront two seemingly-contradictory trends in the US labor market. On the one hand, the rate at which workers change jobs has declined since the 1980s (Molloy, Smith, and Wozniak 2016, 2017). On the other hand, there is a commonly expressed notion that long-term employment relationships have become less common. We reconcile these observations by examining how tenure has changed throughout the tenure distribution and for various demographic groups. Using data from the CPS and PSID, we show that the fraction of workers with low-tenure jobs (less than a year) has been falling since the 1980s in the aggregate and within demographic groups, which is entirely consistent with a decline in job changing. For long-tenure jobs (10 years or more), the trend is less clear, and depends on the choice of time period and data source. However, the standard notion about long-term employment is not unfounded—within most demographic groups, especially prime-age less-educated men, the fraction of workers with long-tenure jobs has been falling. Much of this decline is attributable to industry-specific trends, especially the contraction in the manufacturing sector.

Labor Unions and the Decline in Long Term Employment Relationships in the United States

Henry Farber
,
Princeton University

Abstract

Long-term employment relationships are generally good jobs, indicated in part by higher wages. However, such jobs have become substantially less common in the last 35 years. Over the same period, the unionization rate in the private sector declined substantially and remained robust in the public sector. Using data from the Current Population Survey, I address the questions of the extent to which these trends are related and the extent to which the decline in long-term employment can be accounted for by the decline in labor unions. Preliminary analysis suggests that a substantial fraction of the decline in long-term employment relationships can be accounted for by union decline. This finding is robust to controlling for the age and sex distribution of the workforce along with other demographics. And, importantly, the finding is also robust to controls for industry, occupation, and sector of employment. While it is difficult to draw a firm causal inference, provide some evidence that the decline in job quality and the failure of growth in real wages is related to the
decline of labor unions.
Discussant(s)
Jesse Rothstein
,
University of California-Berkeley
Jason Faberman
,
Federal Reserve Bank of Chicago
Sam Schulhofer-Wohl
,
Federal Reserve Bank of Chicago
JEL Classifications
  • J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers
  • E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy