Thursday, August 31, 2006

Are long-term jobs disappearing?

Economist Ann Huff Stevens punctures another media myth:

For some years it has been that reported that employees in the United States experienced widespread, substantial declines in job security or stability over the past several decades. Various newspaper articles have suggested that big structural changes in labor markets mean that job security is a "myth," that lifetime employment with a single employer is far less likely than it was, say, thirty years ago. Workers themselves worry that their prospects for keeping a job for a long period have shrunk, that they may need several jobs during their careers. "There is, however, a striking lack of solid empirical evidence to support these claims," writes economist Ann Huff Stevens.

In The More Things Change, the More They Stay the Same: Trends in Long-Term Employment in the United States, 1969-2002 (NBER Working Paper No. 11878),Stevens sees stability in the prevalence of long-term employment for men in the United States, contrary to popular views. "Long-term relationships with a single employer are an important feature of the U.S. labor market in 2002, much as they were in 1969," she writes. So, the likelihood is that most workers will have some job during their working lives that lasts for more than 20 years.

Stevens uses data from surveys of men aged 58-62 who were quizzed at the end of their working careers. She finds that in 1969 the average tenure for men in the job they held for the longest period during their careers was 21.9 years. In 2002, the comparable figure was 21.4 years, not much different. Just more than half of men ending their careers in 1969 had been with a single employer for at least 20 years; the same was true in 2002.

From the September 2006 NBER Digest.

Update: Loyal reader mvpy calls attention to lecture notes in which superstar MIT economist Daron Acemoglu makes a similar point. Here is Daron:

there is basically no evidence for greater churning in the labor market. First, measures of job reallocation constructed by Davis and Haltiwanger indicate no increase in job reallocation during the past 20 or so years. Second, despite the popular perception to the contrary, there has not been a large increase in employment instability. The tenure distribution of workers today looks quite similar to what it was 20 years ago. The major exception to this seems to be middle-aged managers, who may be more likely to lose their jobs today than 20-25 years ago.

Daron's lecture notes on "Technology and the Structure of Wages" look like they are well worth reading in their entirety--all 154 pages of them!