Organizational Ecology and Job Mobility

The outside opportunity structure is important in predicting the likelihood and direction of job change but has received little attention. We view the ecology of organizations as a determinant of worker expectations of outside opportunity and connect characterizations of organizational size diversity and inequality with job matching and firm reputation theory on how worker expectations are affected by organizational characteristics. This leads to the predictions that greater organizational diversity and inequality within a sector of the labor market will cause more intrasector job changes and fewer intersector job changes. We test these predictions on intra- and interindustrial and regional job changes, yielding supportive results on both industrial and geographical job mobility. Comparison of the results suggests stronger evidence in favor of reputation than matching theory.