Older workers embrace job hopping – and it’s good for their retirement prospects – Center for Retirement Research

Moving from one job to another allows workers to upgrade to higher-paying employers.

When I talk to relatives about my work as a labor economist, I get the sense that they think the younger generation is a bit fickle about their work. I've heard some version of the same comment at many family gatherings. “You know, we've always had the same job and you just walked around.” When that happened, I nodded politely but thought to myself, “You're wrong.”

In fact, the rate at which people change jobs has been declining over the past few decades. A recent Federal Reserve study found that job transition rates fell by about one-third from the 1990s to the 2010s. The reasons for this decline are unclear, but they have implications for the labor market and retirement security. Despite what my relatives think, job mobility is probably a good thing for the economy. In terms of the labor market, switching between jobs often drives up earnings by allowing workers to “upgrade” to higher-paying employers. Mobility between jobs also benefits the macroeconomy because it allows workers to gradually shift to jobs they are better at, thereby increasing productivity.

Particularly for older workers, reduced mobility will also be an issue. Research I conducted with Steven Sass shows that workers who voluntarily change jobs in their 50s have significantly longer careers than those who stay put. For workers with at least a college education, 45% of workers who stayed in their original job joined the labor force by age 65, compared with 55% of workers who changed jobs. For workers with a high school degree or less, the figures were 40% and 48%, respectively. Given that extending your career is often one of the best ways to improve retirement security, an overall decline in job mobility could be a threat.

The question is: Does the trend among older workers follow the overall trend? Some evidence suggests that the decline in job-to-job mobility has been concentrated among younger workers. But as far as I know, there hasn't been a study on people in their 50s. Furthermore, even jobs targeting younger workers were halted before the coronavirus outbreak. So I wanted to know what happened to overall job mobility and the mobility of older workers during the tumultuous years of COVID-19 and its aftermath.

To see it all for myself, I followed the approach of a recent paper that used Current Population Survey Annual March Supplement View an individual's job changes during a specific year. Basically, the paper asked how many people had moved from one employer to another in the previous year without any periods of non-employment. Figure 1 shows the results from 1990 to 2024, divided into two age groups: 1) 20-49 years old; 2) 50-59 years old.

For both age groups, mobility rates were highest in 2000, following an increase in mobility in the 1990s. However, younger demographics experienced sharp declines during the dot-com recession and the Great Recession. And, despite rising mobility in the 2010s, mobility among the 20- to 49-year-old age group remains well below its peak in 2000. On the other hand, for people aged 50-59, the decline in mobility during a recession is much smaller. They are almost all the way back to their 2000 peak.

So older workers appear to be swimming against the current. Or, at least for now. As I mentioned in another recent article, job market metrics are everywhere. Two indicators that are particularly relevant to mobility — job vacancies and resignations — have fallen sharply from their post-pandemic highs. The unemployment rate has risen slightly from its post-pandemic lows – rising to 4.4% in February due to unexpected job losses in the United States. Given the relationship between job market weakness and mobility shown in the chart above, one wonders whether job changes are poised to decline again and how older workers will be affected. I will be paying close attention to this issue in the coming year, given its profound impact on early and late career workers.