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We develop prototype job-to-job flow measures to provide new evidence on labor turnover and earnings dynamics in the Great Recession. We find a sharp drop in job mobility in the Great Recession, much sharper than the previous recession, and higher earnings penalties for job transitions with an intervening nonemployment spell. Focusing on residential construction separators in particular, we find increasing rates of industry change and higher earnings penalties from job change in the Great Recession.

This paper uses an integrated employer–employee data‐set to answer two key questions: (i) What is the equilibrium amount of worker reallocation? (ii) How much does firm‐level job reallocation affect worker reallocation? About 26% of workers who had previously exhibited a substantial degree of attachment to their employer change jobs in a given year. About two‐thirds of this reallocation is roughly evenly split within and across broadly defined industries. Firm‐level job and worker reallocation substantially increases the probability of transition for even the most stable group of workers, even after controlling for individual characteristics and firm and industry tenure.