New Census Bureau Tool Illustrates Job-to-Job Flows

The rise in construction jobs in recent years has meant increased hiring from other employers and more hiring of those not currently employed.

But where is all this hiring activity happening?

Construction hiring is especially strong in the Southwest, extending through Nevada, Idaho and Colorado. There is also evidence of robust hiring in northern Appalachia, including Kentucky, West Virginia and Pennsylvania.

A new capability of the updated U.S. Census Bureau’s Job-to-Job Explorer tool (also called J2J Explorer) now shows quarterly J2JHires in the construction industry as a share of average quarterly employment for metro areas across the United States (Figure 1).

J2J Explorer is a web-based interactive analysis and visualization tool based on the Census Bureau’s Job-to-Job Flows (J2J) data. The J2J data follow U.S. workers as they change jobs and flow in and out of employment.

New features include the ability to track moves within and across metro areas, compare earning changes for job switchers, rank results and express flow volumes as a share of the local labor market (normalized data). 

J2J Explorer reveals that in the third quarter of 2017, the construction industry hired the third largest number of workers away from other employers (J2JHires) relative to its size. 

However, hiring is not equal in all parts of the country. Figure 1 shows quarterly J2JHires in the construction industry as a share of average quarterly employment for metro areas across the United States.

Hiring by construction firms is especially strong in the entire state of Nevada and Wyoming as well as large parts of Arizona, Idaho, Kentucky, New Mexico, North Dakota, Oklahoma, Pennsylvania, South Carolina, Texas, and West Virginia. 

Figure 1: Job-to-Job Hires in Construction in 2017Q3, Normalized by Labor Market Size
Source: U.S. Census Bureau, Job-to-Job Flows R2019Q1, as accessed through J2J Explorer: https://j2jexplorer.ces.census.gov/explore.html#93528

In addition to hiring workers away from other employers, firms also hire people not currently employed, referred to throughout this story as “nonemployment.”

Figure 2 shows hiring rates in the construction industry in Midland, Texas, both for workers hired from another job (J2JHireR, solid line) and those hired from nonemployment (NEPersistR, dashed line). Workers coming from nonemployment represent about 30% to 40% of all hires in a given quarter.

Beginning in the third quarter of 2016, the share of job-to-job hires increases relative to hires from nonemployment. This shift likely indicates a tightening of the local labor market where firms hire relatively more workers employed at other firms rather than from nonemployment.

Figure 2: Hiring Rates for the Midland, TX Construction Industry by Quarter
Source: U.S. Census Bureau, Job-to-Job Flows R2019Q1, as accessed through J2J Explorer: https://j2jexplorer.ces.census.gov/explore.html#93810

Hiring a worker away from another employer likely requires firms to pay higher earnings than they would if they hired the same worker from nonemployment.

Figure 3 shows further support of a tight labor market for construction workers in Midland, Texas. The average earnings for new hires (J2JSEarn_Dest, dashed line) is generally above the average earnings at the previous job (J2JSEarn_Orig, solid line).

Figure 3: Quarterly Earnings for New Hires in the Midland, TX Construction Industry
Source: U.S. Census Bureau, Job-to-Job Flows R2019Q1, as accessed through J2J Explorer: https://j2jexplorer.ces.census.gov/explore.html#93540

J2J Explorer can also be used to compare earnings of job stayers. Figure 4 shows that earnings for Midland, job stayers in the Mining, Quarrying, and Oil and Gas Extraction industry are the highest, while earnings for job stayers are lowest in the Construction industry.

New hires from nonemployment in construction earn relatively high earnings compared with job stayers.

Figure 4: 1997Q3 Earnings for Selected Industries in Midland, TX
Source: U.S. Census Bureau, Job-to-Job Flows R2019O1 as accessed through J2J Explorer: https://j2jexplorer.ces.census.gov/explore.html#93546

J2J Explorer also reveals the geographic origins of job hoppers into the Midland construction industry. Figure 5 shows the distribution of the top 10 job-to-job hires by the metro area of the previous jobs of workers.

While approximately 45% of the new hires were previously employed in either Midland or neighboring Odessa, a large fraction of the remaining new hires came from farther outside the local area. 

For the third quarter of 2017, 67 new hires in Midland’s construction industry came from the Houston metro area approximately 500 miles away.

Figure 5: 2017Q3 Job flows to the Midland, TX Construction Industry by Origin Metro Area
Source: U.S. Census Bureau, Job-to-Job Flows R2019O1 as accessed through J2J Explorer: https://j2jexplorer.ces.census.gov/explore.html#93558

The Center for Economic Studies maintains the Local Employment Dynamics (LED) Partnership, a voluntary federal-state partnership that merges worker and employer data to produce enhanced labor market statistics used to research and report workforce dynamics.

Additional LED Partnership data include the Quarterly Workforce Indicators (QWI), Post-Secondary Employment Outcomes (PSEO) and LEHD Origin-Destination Employment Statistics (LODES). 

All are accessible online for public use at lehd.ces.census.gov/data.  The QWI, PSEO and LODES data can be analyzed interactively via the QWI Explorer, PSEO Explorer and OnTheMap applications, respectively.

Kevin McKinney is an economist in the Census Bureau’s Center for Economic Studies (CES). Heath Hayward is a geographer and applications developer in CES. Keith Bailey is the assistant center chief for LEHD Research in CES.