The Long-Term Decline of the U.S. Job Ladder

We quantify how structural changes in the U.S. labor market have contributed to wage stagnation over the past four decades by weakening the job ladder. Using Current Population Survey microdata from 1982–2023 and a partial-equilibrium job-ladder model, we estimate that employed workers today are about half as likely to receive a better-paying outside offer as they were in the 1980s. This decline is unlikely to reflect less efficient matching, weaker labor demand, or changes in workers' acceptance behavior. Instead, cross-state variation is consistent with rising employer concentration and the growing use of noncompete agreements having curtailed opportunities for job shopping. In a general equilibrium version of the model, we find that these changes have reduced annual real wage growth by 0.68 percentage points—roughly one-third of the post-1980 slowdown—with about two-thirds of the effect operating through equilibrium wage setting rather than mechanical reallocation.