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57 In the previous chapter, we showed that high-quality jobs are still relatively available in the United States, though apparently less so than before for workers with lower levels of education or skill. This relative change in the availability of good jobs for less-skilled workers could have important implications for recent and future trends in economic inequality. This set of findings also raises some important questions regarding the relationship between job quality and volatility and what it might mean for worker insecurity. Of course, workers can change jobs for lots of reasons— some by choice, some not. Those who choose to change jobs might be doing so for good reasons and are often able to improve their economic circumstances when they do. As we noted earlier, some prominent authors—like Peter Gosselin, Jacob Hacker, and Louis Uchitelle—have suggested that the risks of income or job loss are rising over the long term. But are workers at greater risk of losing jobs today than in earlier years owing to no fault of their own? How does job volatility—especially of the involuntary kind—vary across different categories of jobs, and particularly in high-quality jobs? And how are the odds of job change or job loss trending over time, both in the overall labor market and by level of job or worker quality? Other questions involve not only the rate of job change or loss, but also the benefits or costs that job change or loss generates for workers. When involuntary job loss (or job displacement) occurs, what are the consequences for workers in terms of lost earnings and benefits, and how do those consequences differ from the effects of job change more generally? If high-quality jobs are becoming less available for some groups of workers, does this affect their ability to replace one good job with another? To what Chapter 3 Job Quality and Volatility: How Do They Affect Worker Earnings? 58 Where Are All the Good Jobs Going? extent are workers’ earnings affected by this growing unavailability, as well as by the loss of job tenure they experience and any difficulties they have finding suitable employment again? And how are these impacts affected by the overall health of the nation’s labor market? We attempt to answer these questions in this chapter. We begin with a brief review of the empirical literature on job displacements. We then use our LEHD data to analyze the rates of job change overall and a measure of involuntary displacements that we have developed. We analyze differences in rates of job change and displacement across different categories of jobs (by firm effect, industry, size) and workers (by education, age, person effect) and look at how these rates have trended over time. We then consider the impact of such job changes on worker earnings. Since earnings are heavily dependent on job quality, the effect of job change or loss on worker earnings should depend on the ability of job-changers or job-losers to replace them with comparable or better jobs. We analyze this ability and how it varies in different times and economic conditions, as well as what it means for the earnings changes of workers who suffer a job loss. Finally, we summarize our findings and briefly review their implications for policy. We find that rates of job change and displacement increased only mildly over the 1990s. We also find that job change (and even displacement) can have either a positive or negative effect on a worker’s earnings, depending to a large extent on the quality of the job that replaces the old one. Thus, a growing unavailability to less-skilled workers of good jobs over time might raise the costs associated with job change or displacement . Furthermore, the costs or benefits associated with job change and loss depend a great deal on the state of the overall labor market; much more positive earnings changes occur when the labor market is strong. But this implies quite serious negative effects of job displacement on many workers in the aftermath of the Great Recession. JOB DISPLACEMENTS: WHAT DOES THE LITERATURE SHOW? As we noted earlier, job changes can have either positive or negative effects on earnings, depending on the extent to which they are voluntary or involuntary (Bartel and Borjas 1981). Voluntary job changes, especially among young or low-income workers, are often associated with earnings increases. Indeed, these changes can account for large portions of the wage increases observed...

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