Fluidity Cfd

[Melissa Alvarado]

US. labor markets became much less fluid in recent decades. Job reallocation rates fell more than a quarter after 1990, and worker reallocation rates fell more than a quarter after 2000. The declines cut across states, industries and demographic groups defined by age, gender and education. Younger and less educated workers had especially large declines, as did the retail sector. A shift to older businesses, an aging workforce, and policy developments that suppress reallocation all contributed to fluidity declines. Drawing on previous work, we argue that reduced fluidity has harmful consequences for productivity, real wages and employment. To quantify the effects of reallocation intensity on employment, we estimate regression models that exploit low frequency variation over time within states, using state-level changes in population composition and other variables as instruments. We find large positive effects of worker reallocation rates on employment, especially for young workers and the less educated. Similar estimates obtain when dropping data from the Great Recession and its aftermath. These results suggest the U.S. economy faced serious impediments to high employment rates well before the Great Recession, and that sustained high employment is unlikely to return without restoring labor market fluidity.

Using panel data from 23 OECD countries, I document that wages grow more over the life-cycle in countries where job-to-job mobility is more common. A life-cycle theory of job shopping and accumulation of skills on the job highlights that a more fluid labor market allows workers to faster relocate to jobs where they can better use their skills, incentivizing accumulation of skills. Lower labor market fluidity reduces life-cycle wage growth by 20 percent and aggregate labor productivity by nine percent across the OECD relative to the US. I derive a set of testable predictions for training and confront them with comparable cross-country training data, finding support for the theory.

This paper previously circulated under the title "Worker Flows and Wage Growth over the Life-Cycle: A Cross-Country Analysis." I am grateful for the generous support and advice of Richard Rogerson. I thank Mark Aguiar, Jorge Alvarez, Adrien Bilal, Carlos Carrillo-Tudela, Matthias Doepke, Domenico Ferraro, Victoria Gregory, Veronica Guerrieri, Gregor Jarosch, Greg Kaplan, Burhan Kuruscu, Guido Menzio, Claudio Michelacci, Ben Moll, Chris Moser, Diego Restuccia, Todd Schoellman, Venky Venkateswaran, Gustavo Ventura, Gianluca Violante, and seminar participants at Arizona State, CEMFI, Einaudi, FRB Richmond, Georgetown, ITAM, Melbourne, MIT, Princeton, Toronto and the SED. I also thank Eurostat for granting me access to the ECHP and EU-SILC data sets. The results and conclusions in this paper are mine and do not represent Eurostat, the European Commission or any of the national statistical agencies whose data are used. All errors are my own. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.

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This episode was produced in partnership with the Center for Humans and Nature, an organization that brings together scholars from a diversity of disciplines to think creatively about our relationships with nature and each other. What do you think evolution can tell us about love and morality? Share your thoughts at humansandnature.org. This episode was made possible through the support of the John Templeton Foundation.

Anne Strainchamps: And, usually by the time you get to your teenage years, you have a pretty good idea, maybe not of who you're going to fall for, but at least what gender. A few people are bisexual, but pretty much we identify as gay or straight. But psychologist LD says that, in fact, most of us are a whole lot less fixed than we think. And the title of her book says it all, Sexual Fluidity: Understanding Women's Love and Desire. Welcome with me please, LD. Hey, Lisa, thank you so much for being here.

Lisa Diamond: It's a pleasure. Well, I want to correct something that you said. You said a few people are bisexual, but most folks are gay or straight. That's what most of us used to think because we didn't have very good data, but now we have a number of large, random, representative surveys that have been done on people's sexual attractions, and actually bisexual patterns of attraction are far more common than exclusively gay or lesbian patterns of attraction.

AS: OK, so, backup and let's figure out how you got to that point. So, 20 years ago, now, right, you started doing this big survey and you should explain this, but you were looking at non-heterosexual women and their sexual orientation, sex lives, desire.

LD: Yeah, at the time I started the study, it was the early 90s. Most of the research on sexual identity development in young people was done on samples of men. So we ended up producing a whole science of men because it was easier to find them. So when I started graduate school, I was like, 'well, you know, I'm a lesbian and a feminist. I'm going to study women!' you know. So I didn't quite know what I was looking for, but I knew I wanted to follow women over time. And, what I found was that, as I tracked women's sexual attractions and sexual identities over time, regardless of where they started, whether they were lesbian, or bisexual, or some of the women were like, 'well, I don't know what I am, but I'm somewhere,' there was a lot of movement. As time went on, some of the women who started out as lesbian ended up falling in love with their male best friends and getting involved with them. Some of the women who were predominantly bisexual then ended up switching to be exclusively lesbian. And I just found that there was a lot more flexibility in women's sexuality than most of the literature at that time had suggested.

LD: I was very surprised, and, initially, I thought, 'well, you know, they're still young. Give them a few more years and everyone will settle down.' And yet, I found that the longer I followed them, the more women started to change, so that, by the time I reached the 10 year point, and now I'm at the 20 year point, change is substantially more common than stability.

AS: So how do you explain this? Because it goes against everything we're taught, and everything we think. We think that we're supposed to settle into a sexual identity, 'I'm only attracted to men' or 'only to women.'

LD: And I think that's because most of the other research tended to look at people at one point in time. And if you capture anyone at one point in time, they may feel pretty certain that where they are is where they are, right. And so if they're, you know, heterosexual they're like, 'well, I'm heterosexual that's who I am.' The trick comes when you let their lives unfold. And most of our lives are a lot more complex than we think. And it looks like our human species just has a lot more capacity for fluidity and for plasticity than most of us imagine.

LD: I came out in my college years, and there wasn't so much of a personal component. I certainly wasn't looking for sexual fluidity. I was just a garden variety lesbian, when I started doing this research, a good plain old boring lesbian.

LD: Well, you know, unfortunately it hasn't. And sometimes I feel bad because I've been asked to speak to a lot of bisexual organizations, because I've been a big advocate for more research on bisexuality, because it is just so much more common then exclusive same-sex sexuality. And often I feel a need to confess to the organizers like, 'I'm actually a lesbian. I'm sorry. I'm like the greatest champion of bisexuals that you can find, but I'm not a bisexual.' And they're like, 'it's OK, you know, we need the lesbians to stand up for us.'

LD: I used to think that women were much more fluid than men. And my thoughts on that have really started to change. I started to do more research on men and I did a study, you know, in Salt Lake City where you would think the men would be pretty rigid. And I found a really surprising degree of fluidity in men's attractions, as well, gay-identified men reporting that they frequently masturbate to fantasies of women, and the straight-identified men saying that they, you know, had some sort of oral sex with a man in the past 12 months. Even in men, I think the boundaries aren't as rigid as they used to be. I think one of the reasons it looks like it's more common in women is that I think we give women in our culture more permission to be affectionate with other women, to have close relationships with other women, that might spill over into unusual affection. And I think we have been more rigid with men, that, you know, men have to be men, and if men are going to have close emotional relationships, they're going to be with women, and not with other men. But some of those norms are changing, and I think men have more permission, now, to, you know, explore intimacy in a variety of ways, with both male and female friends. So I think we'll find out in like another 10, 15 years, you know, how much fluidity differs between women and men, maybe the culture will have caught up for men, as well as women.

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