Trends and cycles in U.S. job mobility

Recent studies document a decline in U.S. labor‐market fluidity from as early as the 1970s on. Making use of the Annual Social and Economic supplement to the Current Population Survey , I uncover a pronounced increase in job‐to‐job mobility from the 1970s to the 1990s, i.e. the annual share of continuously employed job‐to‐job movers rises from 5.9% of the labor force in 1975–1979 to 8.8% in 1995–1999. Job‐to‐job mobility exhibits a downward trend only since the turn of the millennium. In order to provide a formal economic interpretation, I additionally estimate the parameters of the random on‐the‐job search model. Furthermore, I document that job‐to‐job mobility has an unconditional correlation of −0.86 with the unemployment rate at business‐cycle frequencies in 1975–2017, varying by around 3 percentage points over the business cycle.