Must-read: Nick Bunker: “Why is U.S. labor market fluidity drying up?”

Must-Read: Nick Bunker: Why is U.S. labor market fluidity drying up?: “The U.S. labor market is a far less dynamic place than it was 30 years ago…

…Workers today are less likely to get a job while unemployed, move into unemployment, switch jobs, or move across state lines. You’d think just the opposite would be true given some of the discussion about our rapidly changing digital economy, but the data show what the data show. Even still, the reason—or reasons—for the decline in fluidity aren’t known…. Molloy… Smith… Trezzi… and… Wozniak… find that overall fluidity in the U.S. labor market has fallen between 10 percent and 15 percent since the early 1980s. But for some of the individual flows, the decline has been as large as one-third…. The authors find no evidence… that the gain from switching jobs has declined…. While the authors do find some speculative evidence that declines in fluidity are related to declines in social trust, the results aren’t particularly strong…. After their analysis, it seems more likely than not that the decline in labor market fluidity is harmful…