And yet we move: evidence on job-to-job transitions in the euro area

Prepared by Daniela Arlia, Clémence Berson and Agostino Consolo

Published as part of the ECB Economic Bulletin, Issue 7/2025.

This box presents novel data on job-to-job transition rates for the main euro area economies, complementing standard labour market statistics. When workers move from one job to another, it is usually to find a better match for their skills (improving productivity) or because they are able to negotiate a higher salary or obtain better conditions, e.g. in terms of working hours, work environment or commuting time (Moscarini and Postel-Vinay, 2016, 2017; Hahn et al., 2017; Karahan et al., 2017). An increasing number of job-to-job transitions indicates that firms tend to poach more workers from other firms before tapping the pool of unemployed or inactive persons. An analysis of job-to-job transitions can complement the assessment of the different margins of adjustment in the labour market and help gauge wage and productivity developments (Berson et al., 2024; Lagarde, 2025). Against this backdrop, the aim of this box is to compute job-to-job transitions for a subset of euro area countries and a proxy for the euro area aggregate in order to provide a more comprehensive picture of labour market tightness, which has implications for wage and price inflation.

Measuring job-to-job flows requires large micro datasets that link employers and employees over time. To study labour market flows, it is essential to have data that trace career paths. Administrative data based on social security information meet this requirement by enabling a representative random sample of workers to be tracked over several decades, generally based on their date of birth. These data are coupled with information on firms, which allows transitions from one job to another to be identified, as well as movements into and out of the private sector. As administrative data are collected primarily for administrative and operational purposes (for example, managing social security contributions), it takes time for social security institutions to gather, validate and process the raw data, and to make the anonymised data accessible for research purposes. For this reason, they are typically available only with a time lag.

Job-to-job flows are cyclical and provide a complementary measure of labour market tightness. Job-to-job transition rates measure the share of workers changing job from one quarter to the next without a spell of unemployment. Chart A highlights the cyclical behaviour of job-to-job flows. During a downturn, workers have fewer opportunities to find another job and tend to stay at the same establishment. During a boom, workers try to move up the job ladder and change jobs to increase their wages or improve their working conditions. This is observable in all three countries – and hence the euro area aggregate – although the share of job-to-job movers differs from one country to another.

Chart A

Job-to-job transition rates in Germany, Spain, France and a proxy for the euro area

(percentage shares of employment)

Job-to-job moves depend on both worker and job characteristics. In addition to macroeconomic conditions, the opportunity to switch jobs is influenced by the worker’s negotiation power, which varies according to their occupation and skills. It is also affected by factors such as the nature of their contract (full-time versus part-time; permanent versus temporary), age, education level and job opportunities within the firm. Chart B shows data by type of occupation (lower and higher-skilled) for the euro area proxy. Job-to-job transition rates tend to be higher for workers in lower-skilled occupations, especially from the mid-2000s onwards, when European countries began implementing significant labour market reforms.^[1]

Chart B

Job-to-job transition rates across occupations for the euro area aggregate

(percentage shares of employment)

The evidence suggests that workers in lower-skilled occupations are more mobile and account for the bulk of job mover fluctuations. Across types, workers in lower-skilled occupations remain the main drivers of total job-to-job transitions across all three countries (Chart C). Mobility across higher-skilled occupations is significantly lower – some differentiation across countries notwithstanding – with job movers in higher-skilled occupations accounting for only 15% of the total transition rate in 2021 in Spain, but 34% in France and 43% in Germany. These trends largely mirror the composition of the total workforce across the three countries and hold even though the share of higher-skilled workers has steadily increased over time (by 5 percentage points in Spain and 7 percentage points in Germany and France since the mid-2000s, reaching 20%, 47% and 41% respectively in 2021). Skill composition is important as workers are affected by different wage bargaining mechanisms (including minimum wage policies), productivity levels and outside options, as well as sector-specific shocks, which all have implications for wage negotiations. At the macroeconomic level, as an increase in job-to-job transitions is associated with labour market tightness, the overall impact on aggregate wage inflation crucially hinges on the share of workers in lower-skilled occupations, given that this share influences the slope of the wage Phillips curve (Abbritti and Consolo, 2024; Afrouzi et al., 2024).

Chart C

Contribution to job-to-job transition rates by type of occupation in Germany, Spain and France

a) Germany

(percentage shares of employment)

b) Spain

(percentage shares of employment)

c) France

(percentage shares of employment)

The ageing of the euro area labour force is expected to have a negative impact on the job-to-job transition rate. The euro area labour force is getting older (Berson and Botelho, 2023), driven by lower fertility rates, increased longevity and pension reforms that raise the retirement age. At the start of their careers, workers typically climb the job ladder and gain experience primarily by changing employers. As a result, younger cohorts tend to have higher transition rates than older cohorts (Chart D). This also reflects the dual nature of the labour market: young workers are more likely to hold temporary or seasonal contracts, which leads to more frequent job changes. For example, workers aged 15 to 24 change jobs around 2 to 3 percentage points more often than workers aged 25 to 54 in France and Germany, and up to 6 percentage points more often in Spain. However, given the relatively low share of young workers in total employment, their contribution to the overall job-to-job transition rate is limited (8% in Spain, 11% in Germany and 20% in France). By contrast, workers aged 55 to 64 are less mobile than other age groups. While their contribution to the job-to-job transition rate remains lower than that of workers aged 25 to 54, it has been increasing over time.

Chart D

Job-to-job transition rates across age groups for the euro area aggregate

(percentage shares of employment)

In conclusion, job-to-job transition rates are insightful indicators for evaluating labour market tightness, even though they are subject to limitations. Administrative data provide an extensive set of information to measure flows in the labour markets. While providing a comprehensive representation of job-to-job transitions, these data are available only with a time lag. However, administrative data can be used in combination with the ECB’s Consumer Expectations Survey, which includes information on the employment status of interviewees (Dias da Silva et al., 2022), to obtain a real-time update.

References

Abbritti, M. and Consolo, A. (2024), “Labour market skills, endogenous productivity and business cycles”, European Economic Review, Vol. 170, November.

Afrouzi, H., Blanco, A., Drenik, A. and Hurst, E. (2024), “A Theory of How Workers Keep Up With Inflation”, NBER Working Paper, No 33233, National Bureau of Economic Research.

Berson, C., Botelho, V., Dias da Silva, A., Foroni, C., Mohr, M., Schroeder, C. and Weissler, M. (2024), “Explaining the resilience of the euro area labour market between 2022 and 2024”, Economic Bulletin, Issue 8, ECB.

Berson, C. and Botelho, V. (2023), “Record labour participation: workforce gets older, better educated and more female”, The ECB Blog, ECB, 8 November.

Berson, C. and Busson, E. (2023), “Job-to-job flows and wage dynamics”, Eco Notepad, Banque de France, April.

Dias da Silva, A., Rusinova, D. and Weissler, M. (2022), “The labour market recovery in the euro area through the lens of the ECB Consumer Expectations Survey”, Economic Bulletin, Issue 2, ECB.

Hahn, J.K., Hyatt, H.R., Janicki, H.P. and Tibbetts, S.R. (2017), “Job-to-Job Flows and Earnings Growth”, American Economic Review, Vol. 107, No 5, pp. 358-363.

Karahan, F., Michaels, R., Pugsley, B., Sahin, A. and Schuh, R. (2017), “Do Job-to-Job Transitions Drive Wage Fluctuations over the Business Cycle?”, American Economic Review, Vol. 107, No 5, pp. 353-357.

Lagarde, C. (2025), “Beyond hysteresis: resilience in Europe’s labour market”, Opening panel remarks at the annual Economic Policy Symposium organised by the Federal Reserve Bank of Kansas City in Jackson Hole, 23 August.

Moscarini, G. and Postel-Vinay, F. (2016), “Wage posting and business cycles: A quantitative exploration”, Review of Economic Dynamics, Vol. 19, pp. 135-160.

Moscarini, G. and Postel-Vinay, F. (2017), “The Relative Power of Employment-to-Employment Reallocation and Unemployment Exits in Predicting Wage Growth”, American Economic Review, Vol. 107, No 5, pp. 364-368.