posted at 04:50
Author Name: Shane Ferro
US Labor Market Fluidity On The Decline
Declines in labor market fluidity - the ease with which workers can move between jobs - have continued since the 1980s. According to the authors, there's been an unusually "Large secular decline in the pace of job reallocation" during this period in the US. Reallocation is defined as which is the total jobs created plus total jobs destroyed, divided by total jobs in the economy. Perhaps more pressingly, the researchers find that job reallocation rates have an impact on employment rates, particularly for the young and even more strongly for young men. Not only is it associated with lower unemployment rates, but it potentially negatively affects the length of time that the unemployed have to look for work, as fewer job changes likely means fewer job openings, and therefore fewer chances for those out of work to jump back in. Fewer job openings mean fewer people moving between jobs in the same industry. Here's how job churn over the last 15 years breaks down by gender. A shift to older firms An aging workforce The transformation of business models The impact of the information revolution on hiring practices Occupational labor supply restrictions Exceptions to employment-at-will The establishment of protected worker classes "Job lock" because of employer-provided health insurance. Even though there are some reasons why regulating fluidity could be good for workers, the long-term decline in reallocation is bad for the economy.

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