Job Ladders and Growth in Earnings, Hours, and Wages

We use matched employer-employee data to consider the impact of the recent slowdown in the job ladder on wage and earnings growth in the U.S. from 1996 to 2015. We develop an accounting method that measures how earnings changes experienced by workers moving onto and up the job ladder contribute to aggregate growth in earnings. While the higher rate of workers changing employers during expansions tends to increase overall earnings growth, nonemployment transitions offset most of the gains. As a result, the relatively high growth seen in the late 1990s and 2015 is largely driven by the earnings pattern of job stayers. We further investigate the contribution of employer-to-employer transitions and find large “match effects” lead to greater gains in hours than wages.