Most Americans believe that employment stability has declined in recent decades. Initial efforts to document this trend empirically, however, produced mixed results, and so research lost momentum. This review shows that evidence of declines in employment stability is stronger than originally portrayed and that therefore the field deserves renewed attention, particularly in light of the current recession. Research shows consistent declines in employment stability among private-sector male workers but more complex trends for female and public-sector workers. Future research should not only seek to better document these trends but go further by investigating their possible causes and broader consequences. Additionally, although changes have occurred, they do not match the strength of public perceptions. Further work is necessary, therefore, to understand this contradiction and the changing role of employment in American society.
Researchers have long known that large firms pay higher wages than small firms for workers with similar measured characteristics; however, an agreed-upon explanation for this firm size wage effect (FSWE) has not been reached. Recent changes in the economy provide new leverage for testing competing theories for the effect, while questions about the existence and nature of the “New Economy” provide new motivation for exploring this topic. This study uses the 1988-2003 Current Population Survey and finds that the FSWE has declined by about one third over the study period. Examining the competing explanations for the FSWE, this study finds that while the sorting of workers by traits, unions, and industry factors all contribute to some portion of the effect in cross-section, they fail to explain why it has declined over time. Market power explanations also fail to find support. Shifts in organizational structures, particularly a decline of internal labor markets, appear to best fit the results. These findings provide supporting evidence for the “New Economy” and the idea that recent decades have brought about significant changes within organizations and in employment opportunities.
Americans are convinced that employment stability has declined in recent decades, but previous research on this question has led to mixed conclusions. A key challenge is that trends for men and women are in opposite directions and appear to cancel each other out. We clarify this situation by examining trends in employer tenure by sex, marital status, and parental status. We find that married mothers are behind the increase in women’s job tenure, but men and never-married women have seen declines in tenure. Furthermore, we show that the timing of tenure trends for women parallels periods of increased labor force attachment. Finally, we find that shifts in industry and occupation composition can account for the decline in tenure among men and never-married women before 1996 but not afterward. We situate these diverging trends in two broad shifts in expectations, norms, and behaviors in the labor market: the end-of-work discourse and the revolution in women’s identification with paid work. Our findings support the view that job tenure is declining for all groups, but women’s greater labor force attachment, especially their more continuous employment around childbirth, countered and masked this trend.
Optimal matching (OM) is a method for measuring the similarity between pairs of sequences (e.g., work histories). This article discusses two problems with optimal matching. First, the author identifies a flaw in OM ‘‘indel costs’’ and proposes a solution to this flaw. Second, the author discusses the need for benchmarks to measure the added value of OM and to test competing versions. To that end, the author conducts an empirical test of traditional OM, the alternative localized OM, and sequence comparison. The test documents the problem with traditional OM and shows that it is solved by localized OM. The test also demonstrates the value of OM and sequence comparison in examining occupational sequences; both methods capture variation beyond traditional human capital and status attainment measures, although the marginal improvements of OM over sequence comparison may not justify its computational complexity. These results point to the need for more systematic approaches to sequence analysis methods.
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