- Visit this link at the FRB Philadelphia for the latest dataset (Excel file, updated monthly) of Employer-to-Employer monthly transition probability from the Current Population Survey, with three different treatments of missing observations, including the imputation illustrated in “Measuring Employer-to-Employer Reallocation” (with Shigeru Fujita and Fabien Postel-Vinay). Visit the Publications page for the article and replication package performing the imputation.Please provide proper citation when downloading and using the data and/or the code.
- The relationship between the Unemployment-to-Employment UE job finding probability and the vacancy/unemployment ratio, the traditional measure of job market tightness that ignores on the job search, has been linear in logs since 2000, including during the Great Recession, but flattened considerably during (red) and after (black) the pandemic.
- The relationship between the Employer-to-Employer EE transition probability and the vacancy/unemployment ratio, the traditional measure of job market tightness that ignores on the job search, is linear in logs, but shifted out considerably during and after the pandemic (the “Great Resignation”):
- Taken all together, this evidence indicates that the post-pandemic spike in EE transitions (part of the “Great Resignation”) originated from labor supply factors, such as willingness to search on the job and to change jobs to seek remote work arrangements or better working conditions outside of high-contact sectors. In turn, this labor supply push spurred job creation, which was absorbed by the quitters themselves, without benefitting (as is usually the case, when it is driven by labor demand) the unemployed.
- It follows that the post-pandemic boom in job postings and quits were not a sign of a hot labor market, as argued by many commentators and policymakers who extrapolate from history and miss the anomalous behavior of UE. In fact, real wages took an unprecedented hit in 2020-2022, which is difficult to square with the idea that the job market was “hot” because quits and vacancies were high.
