The Long-term Decline of the U.S. Job Ladder

Abstract
We develop a methodology to consistently estimate employer-to-employer (EE) mobility toward higher paying jobs based on publicly available microdata from the Current Population Survey, and use it to document three trends over the past half century. First, such EE mobility fell by half between 1979 and 2023. Second, its decline reduced annual wage growth by over one percentage point. Third, the decline was particularly pronounced for women, those without a college degree, and young workers. The decline does not appear to primarily stem from workers being better matched with their current jobs or the labor market being worse at matching workers and firms. Instead, based on long-run variation across U.S. states, we present evidence consistent with the view that greater labor market concentration reduced workers’ opportunities to transition toward higher paying employers. Joint paper with Aniket Baksy and Daniele Caratelli.

Link to paper.