Intragenerational Mobility and Inequality in Local Labor Markets
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Intragenerational Mobility and Inequality in Local Labor Markets

Abstract

One of sociology’s longstanding concerns is understanding how individuals are allocated to positions in the system of social stratification. While sociology has devoted significant attention to understanding how one’s economic position – their earnings, job, occupation, class, or other marker of economic status – depends on their origins, much less work in recent decades has considered how individuals change economic positions throughout their career, how individuals differ in their chances of changing positions, or how such patterns of intragenerational mobility contribute to economic inequality. Moreover, work that does examine intragenerational mobility often only studies how patterns of mobility and attainment differ according to the characteristics of individual workers, without accounting for the fact that mobility also depends on structural features of the labor market that provide opportunities for such mobility. In this dissertation, I make the case that intragenerational mobility research is essential for understanding the processes that produce economic inequality. I argue that theorizing and modeling intragenerational mobility requires accounting for the interaction between workers and the economic structure in which they are embedded. I then apply this perspective in three empirical chapters on intragenerational mobility. Chapter 2 considers how economic polarization affects lifecycle earnings trajectories and contributes to inequality. Economic polarization is a defining feature of change in the US labor market over the last half century. Polarization is usually thought of along two related dimensions: rising employment in low- and high-paying occupations and shrinking employment in the middle, and rising inequality in occupation-average wages. Much work has demonstrated that polarization is an important driver of rising inequality measured in the cross section. However, it is less well understood how polarization shapes inequalities in earnings mobility over workers’ careers. I argue that polarization in local labor markets is an important source of variation in the structure of economic opportunity that workers face as they progress through their careers. Using data from the Panel Study of Income Dynamics (PSID), US Census, and American Community Survey (ACS), I demonstrate that polarization amplifies inequalities between local labor markets primarily through its effect on workers’ earnings when they enter the labor market. Within highly polarized local labor markets, earnings trajectories for low- and high-earning workers to diverge more than in less polarized labor markets. I find some evidence that polarization disproportionately benefits highly educated workers. Altogether, these dynamics explain a substantial amount of inequality at the beginning of workers’ careers and less inequality as workers age. Chapter 3 develops a novel empirical approach to modeling intragenerational mobility. Recent research on intragenerational earnings mobility has primarily focused on how workers’ earnings change in real dollars over their careers. Much less work has considered relative mobility, or workers’ chances of changing positions in the earnings distribution. While prior research on intragenerational relative earnings mobility is largely descriptive and atheoretical, I examine how well patterns of relative mobility can be explained by four mechanisms of labor market mobility: discrimination, matching, human capital investment, and job mobility. I develop a novel approach using conditional quantile regressions to model how these mechanisms shape the full distribution of earnings ranks workers may attain through selection effects and career processes. Using PSID data, I show that gender, education, and human capital investment are the most important drivers of relative earnings mobility patterns and their change over time. Yet early-career earnings also directly shape opportunities for mid-career attainment after accounting for selection effects and mediating labor market processes. Over time, downward mobility among high-earners increased largely due to women’s growing representation at the top of the earnings distribution and their relatively high risk of downward mobility, while upward mobility remained stable due to a combination rising educational attainment among low-earners and rising returns to education. Chapter 4 investigates Black-White inequalities in earnings and job-task mobility among displaced workers. While social scientists have devoted significant effort to understanding racial economic inequalities, surprisingly little work has examined inequalities in how Black and White workers recover from job loss. I make two contributions towards that end. First, I offer the first historical accounting since the mid-1990s of racial inequalities in job search and earnings changes following job displacement, providing a new trend through 2020. Second, I draw on matching models of the labor market and queueing theory to elaborate the labor market processes that disadvantage Black workers in recovering from job displacement. Using data from the 1984-2020 Displaced Worker Supplement, I demonstrate that Black-White inequality in job search and earnings recovery decreased from the 1980s to the mid-2000s before increasing again after the Great Recession. Further, I show that while White workers experience large earnings losses relative to Black workers due to losing high quality jobs, these effects are outweighed by Black workers’ disadvantage in resorting in the labor market after being displaced. While White workers are typically reemployed in similar, albeit somewhat lower paying, jobs, Black workers sort into categorically distinct jobs characterized by relatively high manual task intensity and relatively low abstract task intensity, and lower wages. Racial inequalities in the types of jobs that workers re-sort into, and consequently racial earnings inequalities post-displacement, are exacerbated by declining demand for routine labor. The final chapter offers some concluding thoughts on the importance of intragenerational mobility research, how the previous chapters advance the intragenerational mobility literature, and some future directions for the research program.