Stay or Leave? Race, Education, and Changing Returns to the External Labor Market Strategy, 1976–2009

Abstract

Since the 1970s, firm-internal opportunities for advancement have waned, and more employees have switched employers to build their career. The author compares the effect of staying and leaving one’s employer and how each career avenue reproduces or alleviates race-based earnings inequality. Using the Panel Study of Income Dynamics 1976–2009, the author finds that racial differences among women are unaffected by external mobility. Among men, the effect of switching depends on education: Since the 1970s, the Black–White gap first widened and then narrowed among male high school graduates. In contrast, the race gap first narrowed and then widened among male college graduates.