Local Labor Market Tightness and Job Quality: Evidence from Job Changers

Authors

• Brad J. Hershbein, W.E. Upjohn Institute for Employment ResearchFollow
• Katherine Lim, U.S. Dept. of Agriculture, Economic Research ServiceFollow
• Douglas Webber, Federal Reserve BoardFollow
• Mike Zabek, Federal Reserve BoardFollow

Upjohn Author ORCID Identifier

https://orcid.org/0000-0002-2534-8164

Series

Upjohn Institute working paper ; 26-433

DOI

10.17848/wp26-433

Issue Date

July 2026

Abstract

Using novel data from the Survey of Household Economics and Decisionmaking, we examine how labor market tightness affects workers’ job quality. We estimate that a 10 percent increase in job vacancies not only increases the probability of changing jobs, it yields an 11–18 percent increase in the (unconditional) probability of switching to a better job overall, and one with greater pay and benefits, interest in the work, and advancement opportunities. Because tight labor markets improve both worker pay and job amenities in roughly the same proportion, their benefits to workers are underestimated when based on pay alone.

Sponsorship

U.S. Dept. of Agriculture, Economic Research Service

Subject Areas

LABOR MARKET ISSUES; Wages, health insurance and other benefits; Nonwage benefits