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The U.S. Job Ladder and the Low-Wage Jobs of the New Millennium

Author

Listed:
  • Nellie Zhao

    (Cornell University)

  • Henry Hyatt

    (US Census Bureau)

  • Isabel Cairo

    (Board of Governors of the Federal Reserve System)

Abstract

In the years following 2000, the U.S. economy has exhibited relatively strong growth in lower-paying jobs. Previous studies have put this growth in the context of shocks to particular higher-paying industries or occupations. In this study, we consider the implications of a ``job ladder'' in the context of labor market downturns associated with the 2001 and 2007-2009 recessions. We propose and estimate a model of on-the-job search, which allows us to explore the effects of aggregate demand shocks on the composition of employment. When aggregate labor market conditions are weak, the least productive employers lose workers through poaching to more productive employers at a slower rate. Our empirical analysis links the slowdown in the job ladder with the buildup in low-paying jobs.

Suggested Citation

  • Nellie Zhao & Henry Hyatt & Isabel Cairo, 2016. "The U.S. Job Ladder and the Low-Wage Jobs of the New Millennium," 2016 Meeting Papers 1414, Society for Economic Dynamics.
    • Handle: RePEc:red:sed016:1414
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    References listed on IDEAS

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