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The interactions of workers and firms in the low-wage labor market
August 2002
Working Paper Number:
tp-2002-12
This paper presents an analysis of workers who persistently have low earnings in
the labor market over a period of three or more years. Some of these workers manage to
escape from this low-earning status over subsequent years, while many do not. Using
data from the Longitudinal Employer Household Dynamics (LEHD) project at the U.S.
Census Bureau, we analyze the characteristics of persons and especially of their firms and
jobs that enable some to improve their earnings status over time.
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Worker Advancement in the Low-Wage Labor Market: The Importance of Good Jobs
July 2003
Working Paper Number:
tp-2003-08
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Employer-to-Employer Flows in the United States: Estimates Using Linked Employer-Employee Data
September 2010
Working Paper Number:
CES-10-26
We use administrative data linking workers and firms to study employer-to-employer flows. After discussing how to identify such flows in quarterly data, we investigate their basic empirical patterns. We find that the pace of employer-to-employer flows is high, representing about 4 percent of employment and 30 percent of separations each quarter. The pace of employer-to-employer flows is highly procyclical, and varies systematically across worker, job and employer characteristics. Our findings regarding job tenure and earnings dynamics suggest that for those workers moving directly to new jobs, the new jobs are generally better jobs; however, this pattern is highly procyclical. There are rich patterns in terms of origin and destination of industries. We find somewhat surprisingly that more than half of the workers making employer-to-employer transitions switch even broadly-defined industries (NAICS supersectors).
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The Long-Term Effects of Job Mobility on the Adult Earnings of Young Men: Evidence from Integrated Employer-Employee Data
June 2005
Working Paper Number:
CES-05-05
The paper follows a population of 18-year-old men to examine the impact that early job mobility has on their earnings prospects as young adults. Longitudinal employer-employee data from the state of Maryland allow me to take into consideration the endogenous determination of mobility in response to unobserved worker as well as firm characteristics, which may lead to spurious results. The descriptive portion of the paper shows that mobility patterns of young workers differ considerably with the characteristics of the firm; however, growth patterns are not significantly different on average. Workers employed in high-turnover firms (such as those in retail and services) experience more job turnover but similar rates of wage growth compared to workers employed in low turnover firms (such as those in manufacturing); however, their wage levels remain below and the wage gap actually increases over time. Regression results controlling for unobservable show that employers in the low-turnover sector discount earnings of workers who displayed early market mobility. By contrast, I find no evidence that mobility has negative effects for workers that remain employed in the high turnover sector.
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Job-to-Job Flows and the Business Cycle
March 2012
Working Paper Number:
CES-12-04
Job-to-job flows represent one of the most significant opportunities for the development of new economic statistics, having been made possible by the increased availability of matched employer-employee datasets for statistical tabulation. In this paper, we analyze a new database of job-to-job flows from 1999 to 2010 in the United States. This analysis provides definitive benchmarks on gross employment flows, origin and destination industries, nonemployment, and associated earnings. To demonstrate the usefulness of these statistics, we evaluate them in the context of the recessions of 2001 and 2007, as well as the economic expansion between the two. We find a sharp drop in job mobility in the Great Recession, much sharper than the previous recession, and higher earnings penalties for job transitions with an intervening nonemployment spell. This fall in job mobility is found within all age groups but is largest among younger workers. We also examine outcomes for displaced workers and examine labor market adjustment in several specific industries. Generally, we find higher rates of nonemployment upon job separation, increasing rates of industry change and higher earnings penalties from job change in the Great Recession.
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The Dynamics of Worker Reallocation Within and Across Industries
June 2005
Working Paper Number:
tp-2005-02
This paper uses an integrated employer-employee data set to answer two key questions:
1. What is the "equilibrium" amount of worker reallocation in the economy - both within and across industries?
2. How much does firm-level job reallocation affect the separation probabilities of workers?
Consistent with other work, we find that there is a great deal of reallocation in the economy,
although this varies substantially across demographic group. Much worker reallocation is
within the economy, roughly evenly split between within and across broadly defined
industries. An important new finding is that much of this reallocation is confined to a
relatively small subset of workers that is shuffled across jobs - both within and across
industries - in the economy. However, we also find that even for the most stable group of
workers, firm level job reallocation substantially increases the probability of transition for
even the most stable group of workers. Finally, workers who are employed in industries that
provide low returns to tenure are much more likely to reallocate both within and across
industries.
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The Shifting Job Tenure Distribution
January 2016
Working Paper Number:
CES-16-12R
There has been a shift in the U.S. job tenure distribution toward longer-duration jobs since 2000. This change is apparent both in the tenure supplements to the Current Population Survey and in matched employer-employee data. A substantial portion of this shift can be accounted for by the ageing of the workforce and the decline in the entry rate of new employer businesses. This shift is accounted for more by declines in the hiring rate, which are concentrated in the labor market downturns associated with the 2001 and 2007-2009 recessions, rather than declines in separation rates. The increase in average real earnings since 2007 is less than what would be predicted by the shift toward longer-tenure jobs because of declines in tenure-held-constant real earnings. Regression estimates of the returns to job tenure provide no evidence that the shift in the job tenure distribution is being driven by better matches between workers and employers.
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U.S. Long-Term Earnings Outcomes by Sex, Race, Ethnicity, and Place of Birth
May 2021
Working Paper Number:
CES-21-07R
This paper is part of the Global Income Dynamics Project cross-country comparison of earnings inequality, volatility, and mobility. Using data from the U.S. Census Bureau's Longitudinal Employer-Household Dynamics (LEHD) infrastructure files we produce a uniform set of earnings statistics for the U.S. From 1998 to 2019, we find U.S. earnings inequality has increased and volatility has decreased. The combination of increased inequality and reduced volatility suggest earnings growth differs substantially across different demographic groups. We explore this further by estimating 12-year average earnings for a single cohort of age 25-54 eligible workers. Differences in labor supply (hours paid and quarters worked) are found to explain almost 90% of the variation in worker earnings, although even after controlling for labor supply substantial earnings differences across demographic groups remain unexplained. Using a quantile regression approach, we estimate counterfactual earnings distributions for each demographic group. We find that at the bottom of the earnings distribution differences in characteristics such as hours paid, geographic division, industry, and education explain almost all the earnings gap, however above the median the contribution of the differences in the returns to characteristics becomes the dominant component.
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Estimating the "True" Cost of Job Loss: Evidence Using Matched Data from Califormia 1991-2000
June 2009
Working Paper Number:
CES-09-14
Estimates of the cost of job displacement from survey and administrative data differ markedly. This paper uses a unique match of data between the Displaced Worker Survey (DWS) and administrative wage records from California to examine the sources of this discrepancy. When we use similar estimation methods and account for measurement error in survey wages correlated with worker demographics, estimates of earnings losses at displacement are similar from both datasets and significantly larger than those based on the DWS alone. Also correcting for measurement errors in reported displacements suggests both sources of such estimates may yield lower bounds for the true cost of displacement.
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Using linked employer-employee data to investigate the speed of adjustments in downsizing firms
May 2006
Working Paper Number:
tp-2006-03
When firms are faced with a demand shock, adjustment can take many forms. Firms can adjust
physical capital, human capital, or both. The speed of adjustment may differ as well: costs of
adjustment, the type of shock, the legal and economic enviroment all matter. In this paper, we
focus on firms that downsized between 1992 and 1997, but ultimately survive, and investigate how
the human capital distribution within a firm influences the speed of adjustment, ceteris paribus. In
other words, when do firms use mass layoffs instead of attrition to adjust the level of employment.
We combine worker-level wage records and measures of human capital with firm-level characteristics
of the production function, and use levels and changes in these variables to characterize
the choice of adjustment method and speed. Firms are described/compared up to 9 years prior to
death. We also consider how workers fare after leaving downsizing firms, and analyze if observed
differences in post-separation outcomes of workers provide clues to the choice of adjustment speed.
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