Careers Within Firms: Occupational Mobility over the Lifecycle” (Labour 2019)

Abstract: With falling labor market dynamism in the United States, opportunities within firms take on increasing importance in young workers’ career progression. Developing a variety of occupational ranking metrics, I show that occupational mobility within firms follows a standard lifecycle pattern in which the frequency, distance, and wage return from mobility fall with age. However, when upward and downward mobility are considered separately, the distance of moves increases over the lifecycle. Thus, while young workers make the smallest distance occupational moves up and down, they have the largest wage gains and losses associated with these moves. I find that wage growth for young workers deteriorated substantially in the first decade of the 2000s, primarily driven by a reduction in wage growth within firms, whereas mid-career workers have experienced no such change. I argue this is most likely driven by the dramatic fall in employer-to-employer mobility for young workers since the early 2000s. Encouragingly, wage growth has improved markedly for young workers since 2012.

Upjohn Institute working paper; 18-286