Local Market Scale and the Pattern of Job Changes Among Young Men
Upjohn Institute Working Paper 06-131
Christopher H. Wheeler
Federal Reserve Bank of St. Louis
e-mail: christopher.h.wheeler@stls.frb.org
November 7, 2006
JEL Classification Codes: J24, R23
Abstract
In finding a career, workers tend to make numerous job changes, with the majority
of ‘complex’ changes (i.e. those involving changes of industry) occurring relatively early
in their working lives. This pattern suggests that workers tend to experiment with
different types of work before settling on the one they like best. Of course, since the
extent of economic diversity differs substantially across local labor markets in the U.S.
(e.g. counties and cities), this career search process may exhibit important differences
depending on the size of a worker’s local market. This paper explores this issue using a
sample of young male workers drawn from the National Longitudinal Survey of Youth
1979 Cohort. The results uncover two rather striking patterns. First, the likelihood
that a worker changes industries rises with the size and diversity of his local labor market
when considering the first job change he makes. Second, however, this association
gradually decreases as a worker makes greater numbers of job changes. By the time
he makes his fourth change, the likelihood of changing industries significantly decreases
with the scale and diversity of the local market. Both results are consistent with the
idea that cities play an important role in the job matching process.
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