The share of Australian workers who change employers in a given year has decreased a lot. In fact, this rate has more than halved since the 1970s, according to official statistics.

Why is this, and does it matter? We explored this in a recent paper. It turns out the decline is actually smaller and more recent than official statistics suggest.

Demographic change explains the decline in the years before the global financial crisis in 2008. In particular, young workers change jobs much more often than older people and the workforce is getting older.

However, there are several reasons for the more rapid decline since the financial crisis. Many of these are cause for concern. But it’s not all bad news.

Why is job mobility important?

There is no ideal rate of job switching. However, the share of people changing jobs is often seen as an indicator of how dynamic the economy is. The Productivity Commission has also been focused on ways to make the economy more dynamic.

In a dynamic economy, productive firms emerge, innovate and compete strongly for workers, who follow new opportunities.

Moving from one firm to another can have several effects. New workers bring new ideas, they tend to be better-suited for the firms they move to and they receive pay rises they wouldn’t have........

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