Keeping Company

Job stability is still the rule.

Contemporary conventional wisdom holds that workers are moving from job to job with increasing rapidity. As an economist for Manpower, a temporary-help company, put it to The New York Times, "The labor market today, if you look at it closely, provides almost no long-term secure jobs."

But such a view is contradicted by the latest research on the subject. "Job Stability in the United States," a recent National Bureau of Economic Research working paper by University of Pennsylvania economists Francis X. Diebold and Daniel Polsky, and Michigan State's David Neumark, finds that job stability for most workers has either remained the same or slightly increased over the past 20 years.

Using Census Bureau data and correcting for business cycle changes, the authors estimate that the chances of a worker being with the same employer in 1983, 1987, and 1991 remained about even. In fact, the four-year retention rate decreased only slightly, from 53 percent for 1983-1987 to 51 percent for 1987-1991. Similarly, for the past two decades, the likelihood of a worker being with the same firm after 10 years has hovered around one in four, increasing from 26 percent for 1973-1983 to 27 percent for 1981-1991.

The authors, who break job-retention rates down in terms of race, gender, education, and occupation, do find some evidence of relative declines in job stability for groups that experienced the sharpest relative wage declines during the '80s and early '90s—especially among unskilled workers, high school dropouts, high school graduates, and blacks.

"Taken as a whole," however, Diebold, Polsky, and Neumark conclude, "the evidence to date certainly does not point toward a…decline in job stability."