Job to Job Flows and the Business Cycle

Movements of workers between jobs are the principal mechanism by which labor markets allocate workers to optimize productivity. While these flows are large and economically important, they represent a significant gap in available economic statistics. In this paper, we analyze a new database of job-to-job flows from 1998 to 2010 for the United States. This analysis provides new estimates of gross employment flows, origin and destination industries, nonemployment, and associated earnings. We evaluate these pilot data in the context of the last two recessions and the intervening economic expansion. We find sharp drops in rates of job change in both recessions, with the largest declines among younger workers. There is cyclicality in both earnings gains from job change and earnings penalties from nonemployment. We also show evidence of higher rates of nonemployment upon job separation, increasing rates of industry change and higher earnings penalties from job change in the Great Recession.