Changing Stability in U.S. Employment Relationships

I. Introduction

A worker’s tenure with an employer is often seen as a measure of employment stability, as well as a sign of the worker’s and employer’s satisfaction with the current employment relationship. Among economists, this view derives from models of job search where a long-lasting relationship is the result of a relatively good match for both the worker and the employer. If the match was not good, then a small shock or the arrival of another offer could easily sever the relationship. Employers may value stability, apart from match quality, as turnover can be costly and longer tenure can allow workers to develop firm-specific human capital. Stability may also be valued by workers, who list job security as important in surveys.¹ Tenure is also a relevant outcome for those studying dynamism in firm creation and mobility in the labor market (Hall and Kudlyak 2019; Jung and Kuhn 2019; Molloy et al. 2016; among others). Despite the importance of tenure for these topics, job tenure has received relatively little study from economic researchers.

One reason for the lack of studies on employment tenure might be that measures of aggregate job tenure have changed little in recent decades. Average and median tenure have been essentially flat since at least the mid-1990s, suggesting at face value that employment stability has also been fairly constant over this period. However, other indicators of job stability have changed notably. For example, recent research has identified a decline in job changing among U.S. workers since the 1980s, potentially signaling an increase in job stability, at least for some workers (Hyatt and Spletzer 2013; Davis and Haltiwanger 2014; Molloy et al. 2016; Molloy, Smith, and Wozniak 2017).² Meanwhile, employment rates for some demographic groups have changed substantially over the past four decades, which may also reflect changes in employment stability and have implications for longer-tenure employment relationships (Coglianese 2018; Aguiar et al. 2021).³ At the same time, there appears to be a perception among some labor market observers that long-term employment relationships have become less common and that the labor market provides less stability than it did in past decades, perhaps owing to structural changes in the labor market, such as the decline in manufacturing employment, the rise in service sector employment, and employment displacement related to automation and globalization.⁴

We examine changes in the distribution of job tenure since the 1980s and assess how these trends relate to changes in other measures of job stability and job satisfaction. Our analysis focuses on the upper and lower tails of the tenure distribution—that is workers with tenure greater than 20 years and workers with tenure less than one year—because the tails turn out to reveal interesting dynamics over the past several decades. Specifically, decreases in the lower tail of the distribution are consistent with the decline in labor market fluidity that has been documented in previous research. At the same time, decreases in the upper tail of the distribution for men illustrate a reduced prevalence of long-term employment relationships, while increases in the upper tail of the distribution for women illustrate the opposite.

Our evidence is derived from major publicly available data sources on worker tenure combined with auxiliary data sets that allow us to investigate the nature of job changing and worker perceptions of job stability over time. We first use the Current Population Survey (CPS) (Flood et al. 2020; U.S. Bureau of the Census 1987, 1991) to investigate changes in the aggregate distribution of job tenure over three and a half decades. We show that short-tenure jobs have become less common since 1980, while the fraction of workers with long-tenure spells (20 or more years) has risen a bit.

The small increase in long tenure in the aggregate masks several important and offsetting influences. First, the aging of the population has boosted the fraction of workers with long-tenure spells (because older workers tend to have longer tenure), as has growing female labor force attachment (leading to an increase in long tenure among married women). Pushing in the other direction, we find a substantial decline in the fraction of older men who have worked with the same employer for more than 20 years—which may be the source of the perception among some that employment relationships have become less stable than decades past. For men, the decline in long tenure appears to reflect in part the shift away from manufacturing (which was traditionally a high-tenure industry); declining unionization also appears to have some importance. That said, the decline in long tenure for men is apparent in many industries and for many types of workers. Exploring differences across birth cohorts, we provide evidence that the decline in long tenure for men appears to be associated with an increase in mid-career separations. Specifically, more recent cohorts have had a greater likelihood of employment separation in their mid-30s to mid-50s, making it more difficult to attain long-tenure employment. For, women, the reverse is true. For more recent cohorts, long-tenure rates are higher, and their mid-career separation rates were lower than earlier cohorts.

Next, we turn to the short end of the tenure distribution. Unlike the long end, we find that only a small portion of the change in workers with short tenure (less than one year of tenure) can be explained by age or any other observable factors. This result parallels findings for the decline in job-to-job mobility, which is also largely unrelated to observable worker characteristics (Molloy, Smith, and Wozniak 2017). This result is also consistent with Hyatt and Spletzer (2017) and Pries and Rogerson (2019), who both find that observable characteristics explain little of the decline in the fraction of jobs that last for only one quarter.

To further understand what has caused the decline in the fraction of workers with less than one year of tenure, we use data from the Survey of Income and Program Participation (SIPP) to examine trends in inflows to the shortest tenure group. We find that a decline in job-to-job transitions has been an important factor in reducing the fraction of short-tenure workers, whereas the fraction of workers that entered short tenure from nonemployment has remained fairly steady. A decline in job-to-job transitions for workers with less than one year of tenure is a primary driver of the overall decline in job-to-job transitions, and hence declining churn among low-tenure workers is an important explanation for the decline in short-tenure employment. Complementary analysis using data from the National Longitudinal Survey of Youth (NLSY) and the CPS also suggests that separation rates have declined the most for the lowest-tenure workers.

Our analysis naturally leads to questions about how these long-run shifts in employment tenure may be related to changes in worker perceptions of job stability or job satisfaction. Has the decline in churning among short-tenure workers been accompanied by an increase in perceived job stability or satisfaction? Conversely, have the decreases in men’s long-tenure spells been associated with reductions in perceived job stability or satisfaction? To address these questions, we examine survey data on worker perceptions in the 1970s and 2000s. Consistent with the rise in retention rates for short-tenure workers, short-tenure workers are more likely to report that their “job stability is good” in the 2000s than in the 1970s. Meanwhile, perceptions of job satisfaction and job security for older men who are working have been stable from the 1970s to the 2000s, suggesting that the declines in long employment spells have not been associated with an increase in anxiety about their current employment.

Our paper makes several contributions. First, we present an updated and more comprehensive set of facts about changes in employer tenure among U.S. workers. This is an opportune time to reexamine these facts given the significant changes over the last two decades in measures of job mobility and separations. Although other authors have documented changing patterns in the tails of the tenure distribution, they have focused on either long or short tenures separately.⁵ By bringing together analysis of long-run changes at both ends of the tenure distribution, we provide a more comprehensive assessment of trends in job changing and employment relationships. Jointly analyzing the two tails of the distribution together helps to illustrate how people are generally changing jobs less often even as long-term employment relationships are becoming less common for men. Moreover, by analyzing distributional changes at the ends of the job tenure distribution in tandem, we can describe the relative importance of a common set of factors for explaining these changes. Our analysis shows how several trends in the U.S. economy—the aging of the population, the rise in female labor force attachment, and the decline in the manufacturing sector—are all important in understanding the upper tail of the distribution but do not explain much at the lower tail.

Our second contribution is to revisit and expand on the separate literatures on long and short tenure to better understand the distinct reasons for changes in these tenure types. Specifically, we demonstrate the importance of trends in mid-career separation for explaining the cross-cohort pattern of long tenure for both men and women, as well as differences in the evolution of long tenure between men and women. This is an innovation from previous work exploring trends in long-tenure jobs, for example, Farber (1998) and Diebold, Neumark, and Polsky (1997), and builds on findings in Farber (2010). In terms of short tenure, we show that the trend decline in low-tenure employment is driven by a decline in churn among low-tenure workers. This builds on insights from previous work documenting the decline in short-tenure employment (for example, Hyatt and Spletzer 2017).

Our final contribution is to use additional data on worker perceptions about job stability and longitudinal data on spells of employment and nonemployment in order to better understand the consequences of these shifts in the tenure distribution for workers. Prior research on both topics is quite limited.⁶ Our analysis suggests that worker perceptions of their current job’s stability align with changes in the lower tail of the tenure distribution. By contrast, perceptions of current job stability at the upper tail of the tenure distribution have been stable over the past four decades, despite the substantive changes in employment patterns over this period.

In the following, Section II describes the main data sets that we use to document changes in the tenure distributions and the factors behind it. Section III describes changes in the aggregate tenure distribution since the 1980s. Section IV documents changes in long tenure (20 years of tenure or longer) over this period, quantifies the importance of changes in observable characteristics to these trends, and highlights the cross-cohort link between changes in mid-career separations and long tenure. This analysis is conducted separately for men and women, as the trends are different. Section V documents the decline in short tenure (one year or less), shows that changes in observable characteristics explain little of the decline, and shows that most of the decline in short tenure appears related to the declining rate of job-to-job transitions (rather than other forms of job separations). Section VI explores consequence of these trends in tenure on workers’ perceptions of job stability. Section VII concludes.

II. Data Overview

For our main analysis, we sought publicly available data that allowed for constructing reasonably continuous observations of the tenure distribution for U.S. workers over a long time period. The Current Population Survey (CPS) and the Survey of Income and Program Participation (SIPP) both meet these criteria. Our main outcome of interest is a worker’s tenure with the current employer at the time of the survey, which is reported in both sources, and we have also confirmed our findings where possible in the Panel Study of Income Dynamics (PSID) and the National Longitudinal Survey of Youth (NLSY). Although these data sources are all standard, they differ in how tenure is measured for workers. We therefore provide a brief overview of these sources here, focusing on key measurement features for our analysis. Further detail, including sample sizes and a side-by-side comparison of these sources, can be found in Online Appendix Table 1.

Our analysis of the distribution of worker tenure is based primarily on data spanning 1983–2020 from the CPS, as it provides a longer sample period than the SIPP. This monthly survey periodically includes a job tenure supplement (in the January or February survey) that asks respondents when they started working with their current employer or how long they have been employed with their current employer. For workers who report multiple jobs, tenure is recorded only for their main job. An important caveat is that CPS microdata on this question span changes in survey methodology that make comparisons over long time periods challenging. We work to harmonize the data to ensure comparability, and we believe that the data allow consistent estimates of tenure rates three years and longer back to 1983. Estimates of shorter tenure rates may not be measured consistently pre- and post-1996. See the notes to Online Appendix Table 1 for details.⁷

For this reason, we confirm many of our findings using the SIPP.⁸ Each wave of the panel of the SIPP from 1996 onwards asks the year and month respondents began working for up to two employers; we use information from both employers because the main employer is not identified. This allows us to calculate tenure from self-reported start dates. The SIPP also asks whether a respondent has separated from an employer during the previous four months. This information allows us to calculate tenure at the beginning of a four-month reference period, and hence tenure-specific retention rates. One drawback of the SIPP data is that we do not have data post-2013.⁹ The SIPP does have data on tenure for the late 1980s, but this information is unavailable for the early 1990s, so it is difficult to know whether the early data are comparable to the post-1996 data.

We also use the two National Longitudinal Survey of Youth (NLSY) studies 1979 and 1997, to study tenure for two cohorts of younger workers. The NLSY does not meet all our criteria, but it offers two important advantages. First, it allows us to construct tenure consistently two decades apart, even for short tenure lengths. The NLSY asks respondents about multiple employers in each annual (or biennial) survey, including start and end dates of employment. Second, it allows us to observe reasons for separations, which are not easily observable in the CPS.¹⁰

Finally, we rely on several additional sources that do not offer continuous observation of tenure over time but that can otherwise inform our understanding of changes in tenure for U.S. workers. These include the CPS Annual Social and Economic Supplement, the General Social Survey, and a Department of Labor survey called the Quality of Worklife Survey. We describe the information we use from these sources in the text alongside the relevant results.

III. Changes in the Tenure Distribution since the 1980s

To begin, Figure 1 plots mean and median tenure in the CPS and SIPP over time.¹¹ Both series show roughly stable average and median tenure through the mid-2000s, after which average tenure gradually edged up during and after the 2007–2009 recession. This increase may, in part, reflect composition effects as those with shorter tenure separated from their job at higher frequencies than those with long tenure.¹² In the CPS data, average and median tenure then moved down again, such that average and median tenure in 2020 were not very different from four decades earlier. These estimates are consistent with an earlier literature that found little evidence of a general decline in tenure through the early/mid-1990s (Farber 1998; Diebold, Neumark, and Polsky 1997).

Figure 1

Mean and Median Tenure with the Current Employer, 22–64-Year-Olds

Source: All estimates are from CPS and SIPP microdata, calculated by authors.

Notes: Estimates are for 22–64-year-olds, and exclude self-employed workers and unpaid family workers. Estimates of short tenure (<3 years) in CPS data are likely not strictly comparable in the earlier years of our sample (1983, 1987, 1991) relative to later years (1996+), which may affect comparability of average tenure (but probably not median tenure) in the CPS across these years; see text for more details. NBER recessions are shaded; estimates from the CPS (which were measured in January or February) are assigned to the first quarter of the year and estimates from the SIPP (annual averages) are assigned to the second quarter of the year.

The stability in average and median tenure shown in Figure 1 may seem surprising considering the many changes in the U.S. labor market that might be expected to affect the degree of stability in employment relationships, such as the shift in industrial composition from manufacturing to services, declining union representation, outsourcing (which may have affected longer-term stability), and the decline in labor market dynamism (which may have affected shorter-term stability). But average tenure may mask important changes at different points in the distribution of tenure. Therefore, next we establish the basic facts about how the distribution of employment tenure has changed since the early 1980s.

Figure 2 shows the distribution of tenure at available intervals in the 1980s, 1990s, and 2010s from the CPS. The fraction of workers with shorter tenure has fallen substantially over time. For example, the fraction with less than three years of tenure—the shortest category that we can measure consistently over the entire time period—fell from 35 percent in the 1980s to 32 percent in the 2000s.¹³ Meanwhile, the fraction of workers in most other tenure groups has risen or been flat, with the increase in mass most apparent for workers with tenure from three to ten years and more than 20 years. These changes in the distribution of aggregate tenure seem generally consistent with the decline in labor market fluidity over this period—fewer workers have been with their employer for a short period of time, and more workers have been with their employer for a long period of time.¹⁴

Figure 2

Distribution of Tenure over Time, 22–64-Year-Olds

Source: Authors’ calculations from CPS microdata. Bars show the fraction of the working population with reported tenure in the listed ranges of years of tenure.

Notes: Estimates are for 22–64-year-olds with positive reported tenure, and exclude self-employed workers and unpaid family workers.

Because Figure 2 shows the aggregate tenure distribution, it reflects changes in the demographic composition of employed workers, as well as the tenure experiences of individual workers. Therefore, it is helpful to control for several demographic trends that also influence the distribution of tenure. As emphasized by Farber (2007), the aging of the population over the last few decades has masked a decline in the share of workers with high tenure since older workers have longer tenure on average. It is also important to consider men and women separately because the growing labor force attachment of women during this period has led to differential trends in tenure by gender.

Table 1 reports the employment shares, average tenure, and percent of workers with 20 years or more of tenure by age and gender. The table suggests that a growing share of older men and women in the workforce caused the distribution of aggregate tenure to shift right, as a result of older workers tending to have higher tenure. Within demographic groups, we see divergent patterns in the shift toward longer tenures. Among older men (those over 40), it has become less common to observe tenure longer than 20 years, and average tenure has fallen.¹⁵ For women, the opposite is true. Thus, the aging of the population and the different trend for women obscure the fact that older men are less likely to have stayed with the same employer for a long period of time. This result is perhaps consistent with perceptions of a demise in long-term employment relationships. However, it is worth noting that long tenure is still fairly common among older men, with nearly one-third of men age 60–64 reporting 20 or more years of tenure.

To better understand the contribution of population aging and other demographic changes over this period on average tenure, we run a set of individual-level regressions of tenure on year fixed effects and various demographic controls and plot the coefficients on the year fixed effects. (1983 is the omitted group, so the coefficient on each year can be interpreted as the difference relative to 1983, conditional on the included controls.) The solid black line labeled “no controls” in Figure 3 corresponds to mean tenure in the CPS shown in Figure 1 and shows that mean tenure changed little, on net, since the early 1980s. However, after controlling for age and sex, average tenure has declined by nearly one year (about 15 percent of average tenure in 1983). Adding further controls for education, marital status, race, industry, and occupation (as shown by the solid line marked with hollow triangles) reduces this decline by about half, suggesting that the length of tenure of a worker in 2000 was about 0.5 year shorter than in the 1980s.¹⁶ In other words, a worker with the same characteristics in 2020 as in 1983 has worked with their employer by about one-half year less, on average. Returning to Table 1, declines in tenure have been most relevant for men older than 40, as they are substantially less likely to have worked for the same employer for at least 20 years than in the early 1980s.

Figure 3

Average Tenure, Men and Women Age 22–64, Relative to 1983

Source: Authors’ calculations from microdata to the CPS occupational tenure supplements.

Notes: The figure plots year fixed effects from regressions where the dependent variable is the respondent’s tenure, and the right-hand-side variables are year fixed effects and listed controls. All estimates are relative to the estimated year effect in 1983 and are in percentage points. NBER recessions are shaded.

In sum, our analysis of the distribution of tenure suggests that it would be helpful to focus on the two tails. A declining fraction of men with long tenure could reflect decreases in job stability for older men, while a declining fraction of workers with short tenure could reflect decreases in labor market fluidity and/or increased job stability for younger men and women. In the next two sections we will address each of the tails of the distribution of tenure in turn.

IV. What Explains the Decline in Long-Tenure Spells?

A. The Role of Compositional Shifts in Long-Tenure Trends for Older Men

It is clear that to understand the changes at the long end of the tenure distribution we need to quantify the roles of demographic trends, and we need to consider men separately from women. Toward this end, we begin with a regression analysis on a sample limited to men age 40–64. Like the analysis of mean tenure presented in Figure 3, we first regress an indicator for having more than 20 years of tenure on a set of year indicators. With no other controls in the regression, the coefficients on the year indicators show the evolution of the share of men with long tenure over time. Figure 4 shows that for men age 40–64, the percent of workers with long tenure (the black line) fell by 11 percentage points from 1983 to 2018, before increasing by about 1.5 percentage points between 2018 and 2020.¹⁷ Next, we adjust for changes in the age distribution among working men by adding a set of indicators for whether the worker is 40–44, 45–49, 50–54, 55–59, and 60–64. The line marked with solid circles in the figure plots the year fixed effects from this regression and shows that the age-adjusted decline in male long-tenure rates is about 10.5 percentage points through 2020, about one percentage point more than the unadjusted decline. Hence, the aging of the male population masks the extent of the decline in long-tenure a bit—a finding that is broadly consistent with related findings in Farber (2007). Controlling additionally for education, marital status, and race (the line marked with hollow circles) explains roughly one percentage point of the age-adjusted decline in long tenure.¹⁸ As shown in the bottom panel of Table 2, college-educated men are less likely to be in long-tenure employment than noncollege men, particularly in the 1980s. The increase in men’s college attainment thus accounts for a bit of the overall decline in long tenure, but the figure illustrates that the decline is substantial within all demographic groups.¹⁹

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Table 2

Change in the Percent of Working Men 40–64 with Tenure of 20 Years or More, by Industry and Occupation

Figure 4

Percent of Working Men Age 40–64 with Tenure of 20 Years or More, Relative to 1983

Source: Authors’ calculations from microdata to the CPS occupational tenure supplements. Notes: The figure plots year fixed effects from regressions where the dependent variable is whether the respondent had 20 or more years of tenure, and the right-hand-side variables are year fixed effects and listed controls. All estimates are relative to the estimated year effect in 1983, and are in percentage points. NBER recessions are shaded.

We next examine whether secular changes in the mix of industries or occupations can help account for the changes in the fraction of long-tenure workers, which a priori seems like it should be an important factor since employment has shifted some out of industries where long tenure was more common—in particular, manufacturing. The top panel of Table 2 shows long-tenure rates for manufacturing, public administration, and all other industries. In the 1980s, nearly 40 percent of workers in manufacturing had tenure of 20 years or more—well above most other industries.²⁰ In the 2010s, workers in manufacturing were still more likely to have long tenure relative to other industries, although the gap narrowed, and the share of employment of men age 40–64 in manufacturing declined from about 27 percent in the 1980s to about 12 percent in the 2010s. Hence, both the shift in employment away from high-tenure manufacturing, as well as broad-based declines in long tenure across industries and occupations likely contribute to the aggregate decline in long tenure. The middle panel of Table 2 shows changes in tenure for occupations, where occupations are grouped by routine/nonroutine and manual/cognitive tasks. Long-tenure rates have declined significantly in all the major occupation groups, except nonroutine manual occupations (service jobs), which had the lowest rates of long tenure in the 1980s and experienced little change in long tenure over the period.²¹

To better quantify the importance of industry and occupation shifts, the dashed line marked with solid triangles in Figure 4 shows the trend in men’s long-tenure after controlling for manufacturing. Consistent with a modest role for the shift out of manufacturing, this adjustment accounts for about 1.25 percentage points of the nine percentage points decline in demographically adjusted long tenure (comparing the dashed line marked with solid triangles and the solid line marked with hollow circles). Finally, controlling for the full set of industry and occupation controls explains about another 1.5 percentage points of the decline in long tenure. All told, these demographic, industry, and occupation controls can account for about three percentage points of the 9.5 percentage point decline in long tenure from 1983 to 2020.

The long-run decline in unionization rates is another potential explanation for the decline in long-tenure employment, as long-tenure rates are higher among unionized workers than nonunionized workers, even conditional on industry of employment (Farber et al. 2021).²² The CPS began including union status in the monthly survey in 1984, so we can calculate the contribution of unionization to the decline in long tenure since 1987 (the first tenure survey after 1984); however, union status is asked only of respondents in their fourth or eight month in the CPS, shrinking the sample by three-fourths relative to our earlier analysis. Using this smaller sample in regression specifications like the ones described above, we find that the shift away from union jobs can account for about one-quarter of the decline in long-tenure shares for men age 40–64 from 1987 to 2020 beyond what can be accounted for by changes in the composition of demographics, industries, and occupations. Because much of the decline in long-tenure remains even after controlling for union status and because long-tenure spells decline for both unionized and nonunionized workers (from the 1980s and 1990s to 2010s, the percent of long-tenure unionized workers declined from 42 percent to 35 percent, and for nonunionized workers, declined from 24 percent to 18 percent), it seems that changes in unionization contribute only modestly to declines in the likelihood of long tenure for men.

In summary, it is clear from the CPS statistics that prime-age men are less likely to be in long-term employment relationships than several decades ago. This trend appears to be only in part related to shifts in observable characteristics, including changes in the industry and occupation of workers. After adjusting for these factors, more than one-half of the decline in long tenure for older men remains unexplained by changes in observable demographic characteristics, industry, and occupation.²³

B. Changes in Long Tenure across Cohorts and the Role of Mid-Career Employment Separations

To understand further what might be driving this decline in long tenure, we turn to data on worker retention rates. Mechanically, the number of long-tenure workers at any point in time is a function of the number of long-tenure workers in the previous period who remained with their employer plus inflows of workers who previously had slightly less tenure and who remained with their employer, thus accumulating enough tenure to enter the long-tenure group. That is, the decline in long tenure for men could be due to a combination of reduced retention rates for long-tenure workers (“rising outflows” of long-tenure workers) or reduced retention for short- or medium-tenure workers (“declining inflows” of medium-tenure men into long-tenure employment). More specifically, the share of workers with 20 or more years of tenure in period t equals the following: 1

where is the number of workers with k years of tenure, is the retention rate of k-tenured workers, and E_t is the total number of workers.

We first assess the evidence for the “rising outflows” channel, namely, for evidence of declining retention rates of those already at 20 or more years of tenure, as expressed in Equation 1. We use SIPP data to estimate retention rates for long-tenure workers, plotted in Figure 5.²⁴ The fraction of men with at least 20 years of tenure who remained with their employer over the subsequent four months has been relatively flat since 1996. We cannot observe tenure consistently prior to 1996, but as a proxy for long tenure we also examine retention rates for men age 50–64. This retention rate was also flat from 1996 to 2013 and increased from the mid-1980s to the mid-1990s. A similar analysis of one-month retention rates from CPS data based on matching tenure supplement data to the same respondents’ data from monthly surveys in months after the tenure supplement is also consistent with fairly flat retention rates for long-tenure workers post-1996.²⁵ Hence, it seems unlikely that the decline in long-tenure employment is attributable to declining retention (equivalently, rising separation) rates for workers that attain long-tenure employment.

Figure 5

Retention Rates for Men

Source: Survey of Income and Program Participation

Notes: Black line shows the fraction of men with 20+ years of tenure who remained working with the same employer in the subsequent four months. Dashed line shows the fraction of men age 50–64 who were not unemployed or out of the labor force four months later.

We next explore evidence for the “declining inflows” channel. Equation 1 expresses this channel as a function of the retention rate of workers with 19 years of tenure. But of course, the number of workers with 19 years of tenure is partly a function of the retention rate of workers with 18 years of tenure. More generally, at any period t, the number of workers eligible to be retained to the next tenure category k is a recursive function of retention rates in all previous periods, extending back to the hire date k periods earlier, as long as k is greater than the minimum tenure bin. That is: 2

Equation 2 makes clear that eligibility for long tenure is a function of retention rates over the entire employment relationship. We are unaware of a large longitudinal data source with which to calculate retention rates reliably over long periods of time (a methodological change in the SIPP prevents analysis of retention rates prior to 1996). In the absence of such data, we can examine the link between long tenure and earlier career retention rates by comparing birth cohorts that were toward the end of their career in the early 1980s (when long-tenure rates were higher) and those that were toward the end of their career in the 2010s (when long-tenure rates were lower). That is, did more recent birth cohorts, with lower long-tenure rates, experience lower retention rates earlier in their career, and if so, at what point in their career?

Toward this end, we calculate three measures of employment separation at various ages and for many birth cohorts. Specifically, using the Annual Social and Economic Supplement (ASEC) to the CPS, we can estimate the fraction of respondents who report being employed at some point during the previous year but not currently (a measure of employment separations that do not result in rapid reemployment), the fraction of respondents who report having more than one primary employer in the previous year (a measure of separations that do result in another job fairly quickly), and the unemployment rate (a measure of employment disruptions more generally). For these three measures to reflect mid-career conditions, we calculate them for men age 35–54. Figure 6 plots each of these measures for cohorts born in 1927–1963 (the right axis) along with the average percent of the cohort with long tenure at ages 55–64 conditional on employment (dashed line, left axis).²⁶ Indeed, average unemployment rates and separation rates at ages 35–54 (the solid lines marked with triangles and squares) have increased on net across cohorts as long-tenure rates declined. The most substantial declines in long tenure and increases in separations from employment and unemployment are observed between cohorts born in the mid-1920s to mid-1930s and those born in the 1940s and 1950s. Overall, about one-half of the decline in long-tenure rates (and rise in the employment separation rates) occurred between these cohorts. Thereafter, these rates flattened out some, and then beginning with cohorts born in the mid-1950s, long-tenure rates started falling again and separation rates started rising again. Meanwhile, the fraction of men with multiple primary employers (the solid line marked with circles) increased for cohorts born prior to 1950 and then decreased. The decline in this measure for more recent cohorts suggests that mid-career job-to-job changes declined even as long-tenure continued to move down, which is an observation we come back to in our discussion of short tenure in Section IV.

Figure 6

Trends across Cohorts in Long Tenure at Later Career, and Unemployment and Separation Rates at Mid-Career (Men)

Source: For tenure estimates is the CPS tenure supplements from 1983, with cohort-specific long-tenure rates estimated as described in Footnote 25. The source for the unemployment rate and percent employed in the previous year but not employed currently is the March (ASEC) supplement to the CPS.

Notes: The figure shows three-cohort centered moving average to smooth through some volatility.

Next, in Table 3 we analyze the connection between the proxies for mid-career employment disruptions and long tenure later in life, by estimating cohort-level regressions where the dependent variable is the average share of the cohort with 20 or more years of tenure from ages 55–64 (the dashed line in Figure 6), and the explanatory variables are the measures of the cohort’s disruption at mid-career. To begin, in Column 1 we find that the relationship between long tenure later in life and the average separation-from-employment rate at ages 34–54 (corresponding with the solid line with squares in Figure 6) is negative and strongly significant. The same thing is apparent in Column 3 when we use the cohort’s average unemployment rate (corresponding with the solid line with triangles in Figure 6) as the measure of employment disruption. In Columns 2 and 4, we examine in finer detail at which mid-career ages these relationships are strongest. Across cohorts, separation, or unemployment rates early in men’s careers (at ages 25–34) are unassociated with cohorts’ long-tenure rates later in life, while employment disruptions later in their careers (at ages 35–44 or 45–54) are strongly associated with lower long-tenure rates. Finally, in Column 5 we include the average percent of the cohort with multiple primary employers (corresponding with the solid line with circles in Figure 6)—which is also negatively associated with cohorts’ long-tenure rates. We do not separate the multiple employer measure by finer age group because the measure is only available in the CPS since 1976. Therefore, we cannot calculate this measure at earlier ages for all the older cohorts included in the other regressions. When we include all three employment disruption measures at ages 35–54 (not shown), the coefficients on all three are negative, though the coefficient on the multiple employers is small and insignificant, and the coefficients on the separation and unemployment rates are marginally significant. The unemployment and separation rate measures are highly correlated and are likely measuring similar features of the labor market, so we don’t think it is informative to attempt to distinguish between them.

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Table 3

Relationship between a Birth Cohort’s Long-Tenure Share at Age 55–64 and Unemployment Rates Earlier in Life

We interpret these results as consistent with the notion that later birth cohorts of men experienced more employment disruptions in the middle of their career relative to older cohorts, resulting in lower long-tenure rates later in life. Left unexplored in this analysis is why mid-career employment disruptions have become more frequent for men. The answer can potentially inform models like those developed in Jung and Kuhn (2019), who explore the role of long spells at the top of the tenure distribution in the persistent impacts of displacement on worker earnings. Contributing factors could include those related to the decline in prime-age male employment and participation from the late 1960s through mid-2010s, such as the adoption of labor-replacing automation, globalization, increasing competition from Chinese imports, and/or rising disability insurance take-up (for instance, see Abraham and Kearney 2020; Council of Economic Advisors 2016; Congressional Budget Office 2018). Another set of potential explanations could be associated with the nature or magnitude of the recessions in the 1970s and 1980s resulting in more mid-career disruptions than prior decades. Also, the increase in mid-career separations may in part be related to the increase in frequent movements in and out of the labor force over this period for men age 25–54, which as described by Coglianese (2018), appears to be unrelated to changes in labor demand. Finally, the changing nature of unemployment may have contributed to the decline in long tenure as reported by workers. Specifically, permanent separations (as opposed to temporary layoffs) as a share of all separations has increased since the mid-1990s, and unemployment spells are also of longer duration on average than decades earlier. It seems plausible that workers on temporary layoff or with a very short spell of unemployment (who are then rehired by their original employer) may be less likely to think of the unemployment spell as a break in employment (and thus more likely to report being long-tenure later in life) than workers who suffer a permanent layoff or experience a longer spell of unemployment.

C. Returning to Long-Tenure Trends for Older Women

We next move to analyzing a CPS sample restricted to women to understand whether shifts in major observable factors contributed to the rise in long tenure among women. As shown in Figure 7, the pattern in adjusted long-tenure rates for women differ from those for men. Not only has the fraction of women with long tenure risen over time, but shifts in demographic characteristics play a smaller role for women than for men. The trend in the fraction of long-tenure women is still positive even after accounting for age and education. Unlike the case for men, accounting for shifts in industry and occupation do not help to explain this trend further. Online Appendix Figure 2 shows that the increase in long-tenure rates has been fairly similar for less-educated and more-educated women alike. For both education groups, long-tenure rates increased through the early 2000s or so before flattening out or declining slightly. Table 4 reveals that the increase in long tenure for older women has been experienced among all industry and occupation groups, like the broad nature of the shift in long tenure for men.

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Table 4

Change in the Percent of Working Women 40–64 with Tenure of 20 Years or More, by Industry, Occupation, Marital Status, and Education

Figure 7

Percent of Working Women Age 40–64 with Tenure of 20 Years or More, Relative to 1983

Note: See notes to Figure 4. Estimates are in percentage points.

One important distinction in long-tenure trends for women is related to marital status, as shown in the bottom rows of Table 4. In the 1980s, about 15 percent of older, unmarried women were in a long-tenure employment relationship, while 10 percent of married women were. By the 2010s, the ranking had flipped, and married women were slightly more likely to have long-tenured employment. Hence, much of the increase in overall long tenure for women is attributable to gains by married women. Consistent with this result, Hollister and Smith (2014) show that it is only married women that experienced increases in average tenure since 1983 (driven primarily by married mothers in the period prior to 1996). The upward trend in tenure mirrors the increase in labor force participation for women over this period and likely reflects changes in home responsibilities and social perceptions about working mothers that have facilitated women’s participation in the labor market.²⁷

The combination of an increase in long-tenure rates for married women and a decrease in long-tenure rates for men might raise the question of how long-tenure rates have changed at the household level—that is, whether opposite sex households might be just as likely to have a long-tenure worker now as in the past, on net. In unreported analysis, we calculate that the fraction of 40- to 64-year-old men who are in long-tenure households (either because they are themselves in a long-tenure employment relationship or their spouse is), unconditional on their employment status, fell 1.7 percentage points from 1996 to 2020 (from 20.8 percent to 19.1 percent). This compares with a decline in the percent of older men who are employed in a long-tenure job of 2.6 percentage points over this period (from 17.7 percent in 1996 to 15.1 percent in 2020). Thus, the increase in long tenure among married women has not fully offset declines in such tenure for men at the household level.

Finally, we examine the cohort-level relationship between women’s late-career long tenure and mid-career measures of employment disruptions. Figure 8 shows that for women, more recent cohorts have lower rates of mid-career separation into nonemployment and higher rates of long tenure. Hence, like our cross-cohort analysis for men, the trend in mid-career separations appears to be importantly related to the trend in late-career long tenure. But the trends are reversed, with declines in mid-career separations correlated with increase in long tenure later in life for women.²⁸

Figure 8

Trends across Cohorts in Long Tenure at Later Career, and Unemployment and Separation Rates at Mid-Career (Women)

Sources: Tenure estimates are from the CPS tenure supplements from 1983, with cohort-specific long tenure rates estimated as described in Footnote 23. The source for the unemployment rate and percent employed in the previous year but not employed currently is the March (ASEC) supplement to the CPS.

Notes: The figure shows three-cohort centered moving average to smooth through some volatility.

V. What Explains the Decline in Short-Tenure Spells?

We now apply some of the tools of the previous section to try to understand the decline in prevalence of short tenure. But first, we examine our definition of short tenure more closely. Our sample for this analysis consists of 22- to 64-year-olds. We combine results for men and women, since the decline in short-tenure employment turns out to be quite broad-based across demographic groups and subsequent results are similar for men and women. Figure 9 shows the fraction of workers with less than one year of tenure and one to three years of tenure. We show only data since 1996, as neither data set measures tenure consistently in earlier years. The panel on the left shows that short tenure (less than one year) declined from the late 1990s to early 2010s in both the CPS and SIPP, although year-to-year fluctuations differ somewhat across the data sets. The panel on the right shows that the share with one to three years of tenure was little changed on net over this period in both data sets. We conclude that declines in this tail of the tenure distribution are confined to very low levels of tenure, and we therefore define short tenure as less than one year with an employer.

Figure 9

Percent of Workers 22–64 with Tenure Less than One Year or One to Three Years

Source: Authors’ calculations from microdata to the CPS occupational tenure supplements.

Notes: Figure shows the percent of workers 22–64 with tenure in the listed tenure group, in percentage points. Self-employed and unpaid family workers are excluded. Further details are provided in the text. NBER recessions are shaded.

We first examine the contributions of demographics, industry, and skill as we did with long tenure. Figure 10 shows the estimated coefficients on year indicators from various regressions where the dependent variable is whether a worker has tenure of less than one year; these are analogous to the adjusted time trends in Section III. Changes in the age distribution of workers account for some of the decline in short tenure (since older workers are less likely to have short tenure). Accounting for the age and sex composition of the employed population reduces the decline in short tenure by roughly one-third (from three percentage points to two percentage points). Changes in other demographics (namely increasing education) and the industrial and occupational composition of employment push in the other direction—short tenure after adjusting for demographics and industry/occupation declined by essentially the same amount as the unadjusted estimate. Consistent with our finding only a small role for observables in the above figures, we find similar declines in short tenure across sets of workers defined by industry, occupation, education, and gender (Online Appendix Table 2), again illustrating that the decrease in the prevalence of very short-tenure workers is widespread. Results are similar when we examine workers with less than one quarter of tenure and workers with between one quarter and one year of tenure separately (see Online Appendix Figure 3).²⁹

Figure 10

Percent of Workers Age 22–64 with Tenure Less than One Year of Tenure, Relative to 1996

Source: Authors’ calculations from microdata to the CPS occupational tenure supplements.

Notes: The figure plots year fixed effects from regressions where the dependent variable is whether the respondent had less than one year of tenure, and the right-hand-side variables are year fixed effects and listed controls. All estimates are relative to the estimated year effect in 1996 and are in percentage points. NBER recessions are shaded.

To understand this broad decline in the prevalence of short-tenure workers, we consider how flows into new employment relationships and between tenure status bins combine to generate a group of new hires. We use the term “new hires” to identify the lowest tenure category. This decomposition helps clarify, at least in a mechanical sense, the source of the decline in the fraction of workers with short tenure over time, just as the earlier flows equation helped us identify inflows as an important source of the decline in long tenure. We express the number of new hires as a function of the flow of workers entering employment from nonemployment and the flow of workers leaving a previous employer, as in the equation below: 3

where is the number of new hire workers at time t, who by definition are in the min tenure category; is the number of new hires from nonemployment (not in the labor force or unemployed) at time t; and is the job-to-job transition rate for workers in tenure group k over the period, where k = 1 is the first tenure category up from new hires, up to some maximum tenure level K.

This equation illustrates that inflows into the new hires group is the sum of flows into employment from nonemployment and flows into new employment from employment, that is, job-to-job transitions. We implement the decomposition described in Equation 3 using data from the SIPP because the job-to-job transition rate is not measured consistently pre- and post-2007 in the CPS (Fujita, Moscarini, and Postel-Vinay 2020). One drawback of the SIPP data is that we do not have data post-2013, but the lack of post-2013 data is not a substantive concern for this analysis because Figure 9 showed that the share of short-tenure workers was flat from 2012 to 2020. We define new hires in the SIPP as anyone who reports having tenure in their current employer of less than one quarter. Within this group of new hires, individuals who were employed three months earlier are included in job-to-job transitions, and individuals who were either unemployed or not in the labor force three months earlier are entrants from nonemployment. To make the flows easier to interpret, we divide them by the total number of employed workers in the current period. Figure 11 displays the percent of employed workers that are new hires overall, job-to-job transitions, and entrants into employment, showing 12-month moving averages of monthly data because the monthly series are volatile. The percent of new hires fell from about 9 percent in 1996 to about 6 percent in 2013. Most of this decrease can be explained by a decline in the share of employment-to-employment transitions; entrants from nonemployment comprise a smaller fraction of new hires and were a fairly constant fraction of workers over this period. Thus, a decline in job-to-job transitions appears primarily responsible for the decline in the number of new hires.³⁰

Figure 11

Decomposition of the Percent of New Hires in Total Employment, 22–64-Year-Olds in the SIPP

Source: Authors’ calculations from SIPP microdata.

Notes: NBER recessions are shaded. Figure shows 12-month moving averages of monthly transition rates (in percentage points). Gaps in series are because some SIPP panels ended before the next SIPP panels began. New hires are defined as workers with tenure at their employer of less than one quarter. Job-to-job are new hires that were employed three months earlier. Entrants are new hires that were not employed three months earlier.

We further study the decline in job-to-job transitions by calculating the contribution from changes in the share of workers in different tenure groups (a rising share of higher tenure groups will reduce aggregate job-to-job transitions because higher-tenure workers tend to change jobs less often) and the contribution from changes in job-to-job transitions for specific tenure groups. Toward this end, we estimate a counterfactual average job-to-job transition rate for the 2010–2013 period assuming that the shares of each tenure group had remained at their 1996–2000 average while allowing the job-to-job transition rate of each category to evolve as it actually did. The difference between the counterfactual transition rate and the average observed transition rate in 1996–2000 reveals the contribution of changing job-to-job transition rates within tenure group. Similarly, a counterfactual that holds the job-to-job transition rates for each tenure group fixed but allows the shares of each tenure group to evolve will reveal the contribution of changes in the distribution of tenure.

Table 5 reports the results of this exercise. Declines in the job-to-job transition rates within each tenure group are more than twice as important than changes in the distribution of tenure in explaining the decline in the aggregate job-to-job transition rate. And declines in job-to-job transitions among low-tenure workers are more important than declines in transitions among higher-tenure workers. Thus, it appears that the decline in job-to-job transitions, and therefore the decline in the fraction of low-tenure workers, is attributable to less churn among shorter-tenure workers.

A reduction in churning among low-tenure workers is also evident in other data sets. In the NLSY 1979 cohort (where the median observation is from 1988), the average number of main employers held by a worker between the ages of 22 and 30 was 3.9. This average had fallen to 3.5 for the 1997 cohort (median observation from 2008), and Online Appendix Table 3 shows that this decline is most pronounced for lower-tenure workers. Moreover, Online Appendix Figure 4 shows that the increase in tenure by age 30 in the NLSY reflects a shift across cohorts toward having worked for only one or two main employers between the ages of 22 and 30, rather than having worked for four or more employers. The CPS also shows that job-to-job transitions have fallen most for low-tenure workers through 2007; as noted above, job-to-job transitions cannot be measured consistently post-2007 (Fujita, Moscarini, and Postel-Vinay 2020).

Our analysis raises the question of why job-to-job churn has declined and why this is especially the case for for low-tenure workers. We investigate three potential explanations. First, it is possible that employers have become more reluctant over time to terminate new hires. There may be a general reduction in the use of involuntary terminations, which would likely disproportionately impact recent hires, or employers may simply be more concerned that they cannot show cause for terminating an employee they only recently hired (Autor 2003). Either way, if a reduced use of terminations drives declining churn for recent hires, we should observe involuntary separations declining over time and particularly for this group. We test this possibility using the SIPP, and for confirmation, the NLSY. Both surveys ask workers their reason for separating from a past job. The analysis is presented in Online Appendix Figure 5 and Online Appendix Table 3. Cyclical fluctuations are a potential concern in both data series because involuntary separations rise during recessions, and there was a very large recession toward the end of the sample period; however, we conclude that both sources show that the share of separations that are involuntary has changed little over time, with the possible exception of a rise in involuntary separations in the wake of the Great Recession in the SIPP.³¹

A second potential explanation is that reporting and coding of temporary help industry jobs may have changed over time in a way that generates a spurious decline in job-to-job transitions among recent hires. This could be the case if earlier surveys were less likely to frame questions about job tenure as allowing temp help firms to be a main employer. In that case, workers might report tenure temp assignments even if their employment with a staffing firm is longer term. If this industry is better accommodated in later surveys, then we would observe a decline in job-to-job transitions but only because earlier surveys “over-counted” short tenure on temp assignments. We do not have a strong prior as to whether this kind of framing change is an issue, but we check for this possibility again using the SIPP and NLSY information on reason for separating from the previous employer. “Temp job ended” is an option in all waves of both surveys, allowing us to investigate this over time. The results are reported in Online Appendix Figure 6 and Online Appendix Table 3. Less than 5 percent of workers report separating from the previous employer due to a temp job ending, and this share is largely stable over time in both surveys. We conclude that framing of the temp help industry does not contribute to our measured decline in job-to-job transitions among low-tenure workers.

A third explanation is undercounting short duration employment, particularly in recent years as short-term employment may have moved to online gig platforms from the more standard labor market. If respondents are less likely to report gig jobs found online as short-tenure employment than similar jobs found in the past, then we might overstate the decline in short-tenure employment. We view this explanation as unlikely for two reasons. First, the stability in the share of jobs ending because they were temporary suggests that there has been no significant decline in the observation of temporary jobs over time. If past temporary jobs had moved to the gig marketplace and therefore went unreported, we would expect to see respondents reporting fewer jobs ending because of temporary status. Second, the share of workers employed in the gig economy appears to still be small, and regardless, electronic gig platforms were unavailable until the very final years in our analysis (U.S. Bureau of Labor Statistics 2018). They are therefore unlikely to be a major factor in a trend dating back to 1996.³²

We conclude that the decline in job-to-job churn among short-tenure workers is not due to reporting changes in the data or to a single type of separation or employment sector. This decline might possibly be related to a decline in single-quarter employment spells, that is, jobs that last for less than one quarter (Hyatt and Spletzer 2013, 2016, 2017; Pries and Rogerson 2019).³³ Although single-quarter workers and single-quarter jobs are different concepts, some workers with less than one quarter of tenure are in jobs that will last for less than one quarter. Moreover, neither the decline in low-tenure workers nor the decline in one-quarter jobs are strongly related to compositional factors. That said, we caution that many workers with less than one quarter of tenure at the time of observation will remain with their employer for longer than one quarter and therefore ultimately be employed in a job that lasts longer than one quarter.³⁴ Hence, it would be premature to conclude that the decline in single-quarter employment spells fully accounts for the decline in short-tenure worker share, but the corresponding trends are striking and deserve further research.

VI. Consequences of the Shifting Tenure Distribution: Has Security of Employed Workers Changed?

One place to begin an investigation into the broader consequences of the shifting tenure distribution is with worker reports about their own job satisfaction and security. To our knowledge, only one other paper has directly addressed the question of whether worker reports of employment security have changed over time.³⁵ Fullerton and Wallace (2007) analyze responses to the General Social Survey (GSS) question, “Thinking about the next 12 months, how likely is it that you will be laid off?” This question has been asked regularly in the GSS since 1977, allowing construction of a long time series spanning several business cycles.

We graph responses to this question from the GSS by age group in Figure 12. The data show no trend in this self-reported measure of job security for any age group, although the series do exhibit strong cyclicality. In a regression, the aggregate unemployment rate alone explains almost 30 percent of the variation of age-group-specific shares reporting a high likelihood of job loss. Fullerton and Wallace also find that the pattern of unadjusted responses has changed little over time.³⁶ However, their data end just prior to the Great Recession. Our graph shows that even amid this aggregate shock, only the youngest group of workers saw their reported insecurity rise above historic levels. For other age groups, the fraction expecting to lose their jobs in the next year was, depending on the age group, generally somewhat higher than during the recessions of the early 1990s and 2000s, but no greater than during the early 1980s. These patterns indicate that perceived job security fluctuates substantively with the business cycle, but we see no evidence of a long-term trend in perceived stability.

Figure 12

Percent of GSS Respondents Who Report They Feel Likely to Lose Their Job in the Next 12 Months, by Age

Source: is General Social Survey microdata 1977–2016, provided by National Opinion Research Center.

Notes: y-axis is share of (valid) respondents answering that they think it is likely or very likely they will lose their job in the next 12 months, on a four-point scale.

The likelihood of job loss is only one aspect of job security. To bring more evidence to bear on workers’ perceptions of their employment situation, we compile responses from survey questions that provide insight into workers’ attitudes toward their jobs. In the late 1960s and 1970s, the U.S. Department of Labor conducted three cross-sectional surveys to assess the working conditions and quality of employment experienced by the typical American worker. Three waves were conducted in 1969–1970, 1972–1973, and 1977, each with about 1,300 responses. In 2002, the General Social Survey incorporated a “quality of worklife” module that was intended to collect the same type of information as in the surveys from the 1970s. Indeed, many of the survey questions are identical, and sample sizes are similar.³⁷ This module was conducted in 2002, 2006, 2010, and 2014. By comparing the responses from 1969–1977 surveys to the responses from the 2002–2014 surveys, we can get a sense of how these attitudes have changed over the past 30–40 years.

Table 6 reports the answers to parallel questions in the two surveys that pertain to workers’ feelings of job security and satisfaction. Because these attitudes are related to the length of time that a worker has stayed with their employer, we report all statistics by years of tenure with the current employer. The first two columns of the table show the share of respondents in the two surveys who respond that they agree “very much” or “somewhat” that their job security is good. Contrary to what is commonly assumed, but consistent with beliefs about the probability of layoff shown in Figure 12, workers at all tenure levels report the same or greater feelings of security on this measure as compared to 40 years ago. Workers at low tenure levels show substantive increases in reported job security across the surveys, and nearly 90 percent of workers with more than 20 years of tenure report strong feelings of security in both surveys. The second set of columns report responses using a different measure of job security: workers’ assessments of how easy it would be to find an equivalent job. The table shows some declines in this measure of security, but they are modest and concentrated among low-tenure workers. The third set of columns show that job satisfaction has also not changed appreciably over the past four decades.

In the final two columns, we look at workers’ assessments of their likelihood of searching for a new job. Even though workers are not less satisfied with their current job or less secure in their current job, workers are more likely to report plans to look for work in the coming year than was the case four decades ago. We interpret this result as possibly suggesting that search costs have fallen over time, making it easier to search for new opportunities even as satisfaction has remained stable.³⁸

The bottom row of the table shows that we also find no evidence of a decrease in job satisfaction or job security among older men, even though this group has experienced a decrease in the prevalence of long-tenure spells. Above, we showed that the reduction in long tenure is likely related to an increase in mid-career separations. We can think of three reasons why an increase in mid-career separations might not have caused perceptions of job security to decline. First, many of these mid-career separations may have been voluntary and therefore not associated with heightened worker insecurity. Second, many mid-career separations may have occurred during recessions. If workers recognize layoffs as reflecting recessionary pressures, these layoffs may not affect worker perceptions of job security during normal times. This is consistent with the high level of cyclicality in the measure of job security in Figure 11.³⁹ Third, the surveys only have information on perceptions of employed workers. People who experienced an involuntary separation may have more negative perceptions of job security, and the fraction of such people may have increased over time.

To summarize, perceptions of job security and satisfaction have been fairly stable over the past 40 years across age groups and tenure categories.⁴⁰ This holds even for older male workers in the most-affected cohorts, indicating that declines in rates of long tenure don’t seem to be associated with increased anxiety about one’s own current employment. These reports are consistent with Figure 5, which showed that older male workers are not more likely to transition into nonemployment than in the past. Meanwhile, perceptions of job security have actually improved for people with low tenure, perhaps related to the decline in job changing.

VII. Conclusion

We have taken a comprehensive look at the changing distribution of employer tenure among U.S. workers over four decades. Using CPS data (and verified in other sources), we find that a roughly stable mean and median tenure masks a range of changes in the tenure distribution since 1980. By examining changes throughout the tenure distribution comprehensively, we build on work by others that focuses on either short or long tenure independently.

In the left tail, we find that short tenures account for a declining share of employment. The declines are prevalent across demographic groups, as well as industry, occupation, and skill groups, and hence are not explained by compositional changes in the workforce. Instead, these declines appear to be related to a decline in job-to-job transitions among short-tenure workers, especially for workers with less than one year of tenure. Using SIPP data, we show that about 80 percent of the decline in job-to-job transitions since the late 1990s is related to declining separations within tenure groups, with about half the decline coming from the shortest tenure group (those with less than one year of tenure). These declines have been accompanied by an increase in perceived job stability among low-tenure workers over the past four decades. For now, we leave unexplored the question of why churn is declining most strongly in shorter-tenure employment relationships—this is clearly an important direction for future research and critical to understanding the rightward shift in the left tail of the tenure distribution.

In contrast to the short end of the tenure distribution, changes at the long end of the tenure distribution differ across demographic groups, particularly along age and gender lines. The percent of women with at least 20 years of tenure has increased substantially since the 1980s, while the percent of men with long tenure has fallen substantially at older ages. The decline in long-tenure rates for older men can be partly explained by the shift out of manufacturing and other high-tenure sectors, as well as the decrease in unionization. Strikingly, the decline in long tenure among men is roughly similar across skill groups.

However, about two-thirds of the decline in long tenures for men remains unaccounted for by observables. Instead, we find that the likelihood of a separation in mid-career has increased. Evidence suggests that this results in declining inflows into long-tenure employment, meaning that fewer men are eligible to attain long-tenure toward the end of their careers. The increase in mid-career employment disruptions could be related to the secular decline in prime-age male labor-force participation, which economic research has frequently linked to a variety of adverse demand shocks. On the other hand, declines in long-tenure rates for men have not been accompanied by increases in perceived job insecurity, hinting that the mid-career separations experienced by men may have been voluntary or cyclical, rather than reflecting a secular trend in involuntary separations. Notably, the declining incidence of long tenure at older ages was concentrated in cohorts of men born between 1920 and 1940 and again after the late 1950s, suggesting that any explanations should focus specifically on these cohorts. Additional research is needed to disentangle more fully the reasons why mid-career employment disruptions have become more frequent for men.