Occupation ladders over the business cycle

This paper studies occupational mobility over the business cycle. We divide occupations into two broad groups, "attractive" and "nonattractive," where we label an occupation attractive if the total net inflow into this occupation through job-to-job transition is positive or its median annual wage is above the median of the population. We measure total net inflows into both occupation groups. We measure these inflows separately for job-to-job (EE) transitions and transitions from unemployment to employment (UE). We find net inflow from nonattractive to attractive occupations through EE transitions slows during recessions. The relative net inflow through UE transitions has a similar cyclicality. This finding suggests a novel cost of recession: during recessions, workers have fewer opportunities to move to a better occupation.