July 2020

IZA DP No. 13509: Reconciling Occupational Mobility in the Current Population Survey

Christian vom Lehn, Cache Ellsworth, Zachary Kroff

published in: Journal of Labor Economics, 2022, 40 (4), 1005 - 1051

Measuring occupational mobility from the Current Population Survey using recall (retrospective) or linked panel responses (longitudinal) generates substantially different outcomes, both in levels and trends. Using a generalized method of moments technique, we estimate the actual level of occupational mobility and the measurement error in both of these measures for 1981-2018. Measurement error in longitudinal measures is large and has been worsening over time. However, actual occupational mobility is approximately 70% higher than retrospectively measures. Our estimated corrections imply workers in tradable occupations are less likely to switch occupations than previously believed, implying potentially lower welfare gains from trade.