Earnings Growth, Job Flows and Churn

How much do workers making job-to-job transitions benefit from moving away from a shrinking and towards a growing firm? We show that earnings growth in the transition increases with net employment growth at the destination firm and, to a lesser extent, decreases if the origin firm is shrinking. This implies job-to-job transitions with the cross-firm job flow have 23% more earnings growth than average. This balances the negative effect from leaving a shrinking firm against the positive from going to a growing firm and removes turnover-related hires because gross hiring has a much smaller association with earnings than net employment growth.