Free to Move? A Network Approach to the Analysis of Job Mobility

Abstract

Job mobility has many overlapping determinants that are hard to characterize solely on the basis of industry or occupation transitions. Workers may match with, and move to, particular jobs on the basis of match quality, preferences, human capital, and mobility costs. This paper implements a novel method based on complex network analysis to describe how workers move from job to job. Using data from the Panel Study of Income Dynamics (PSID), I find first that the labor market is composed of four distinct segments between which job mobility is relatively unlikely. Second, these segments are not well-described on the basis of industry, occupation, demographic characteristics, or education. Third, mobility segments are associated with earnings heterogeneity, and there is evidence of positive assortative matching across segments. Fourth, the boundaries to job mobility are counter-cyclical: workers move more freely when unemployment is low.