The focus of the literature on the effect of job changes has been on the co
nsequences of job destruction on the individual worker. In this paper we an
alyze the impact on the earnings distribution of both job creation and job
destruction. We establish a link between job reallocation and the movement
of workers into and out of the tails of the earnings distribution. Both job
creating and job destroying employers shed jobs mostly from the middle and
lower tails of the earnings distribution, although this is cyclically very
sensitive. Labor mobility (triggered by job reallocation) is risky: mobile
workers will generally end up in the upper or lower tail of the distributi
on rather than in the middle. If workers move across industry boundaries, t
hey typically move to the lower tails of the distribution. In sum, the fort
unes of workers depend on the fortunes of their employers.