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Role of firms in job creation and destruction in U.S. manufacturing

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  • Scott Schuh
  • Robert K. Triest

Abstract

Research in recent years has documented extensively the fact that labor markets are characterized by large and pervasive flows of jobs among places of employment. However, virtually none of this research pertains to the role of the firm and its decisions in determining job creation and destruction. Previous research and data-gathering efforts have focused on employment at individual physical locations called establishments, or plants. This neglect leaves fundamental questions regarding the role of firms unanswered. Job reallocation occurring within firms may have very different causes and consequences from that occurring between firms. ; In this article the authors provide initial results from their ongoing study of the role of firms and corporate reorganization in the determination of job creation and destruction. Their results are striking: Most job flows are between firms for small firms, but intrafirm flows dominate for very large firms. Most plants are in volatile small firms, but employment is concentrated mainly in relatively stable large firms. While the small-firm sector seems to be in constant flux, the large manufacturing firm sector appears to operate in a relatively steady, and perhaps planned fashion.

Suggested Citation

  • Scott Schuh & Robert K. Triest, 2000. "Role of firms in job creation and destruction in U.S. manufacturing," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 29-44.
    • Handle: RePEc:fip:fedbne:y:2000:i:mar:p:29-44
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    References listed on IDEAS

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    1. Scott Schuh & Robert K. Triest, 1998. "Job reallocation and the business cycle: new facts for an old debate," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 42(Jun), pages 271-357.
    2. Dunne, Timothy & Roberts, Mark J & Samuelson, Larry, 1989. "Plant Turnover and Gross Employment Flows in the U.S. Manufacturing Sector," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 48-71, January.
    3. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
    4. Scott Schuh & Robert K Triest, 1998. "Job Reallocation And The Business Cycle: New Facts An Old Debate," Working Papers 98-11, Center for Economic Studies, U.S. Census Bureau.
    5. John Haltiwanger & Scott Schuh, 1999. "Gross job flows between plants and industries," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 41-64.
    6. Zoltan J Acs & Catherine Armington, 1998. "Longitudinal Establishment And Enterprise Microdata (LEEM) Documentation," Working Papers 98-9, Center for Economic Studies, U.S. Census Bureau.
    7. Jeffrey C. Fuhrer & Scott Schuh, 1998. "Beyond shocks: what causes business cycles?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, issue jun.
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    Cited by:

    1. Julie L. Hotchkiss & M. Melinda Pitts & John C. Robertson, 2003. "The ups and downs of jobs in Georgia: what can we learn about employment dynamics from state administrative data?," FRB Atlanta Working Paper 2003-38, Federal Reserve Bank of Atlanta.
    2. LIU Yang, 2017. "Effects of Wages and Job Productivity on Job Creation and Destruction: Evidence from Japanese division-level employment data," Discussion papers 17060, Research Institute of Economy, Trade and Industry (RIETI).
    3. Katariina Hakkala, 2006. "Corporate restructuring and labor productivity growth," Industrial and Corporate Change, Oxford University Press, vol. 15(4), pages 683-714, August.
    4. Fernando Alvarez & Robert Shimer, 2011. "Search and Rest Unemployment," Econometrica, Econometric Society, vol. 79(1), pages 75-122, January.
    5. Petra Koudelková, 2014. "Innovation in Small and Medium Enterprises in the Czech Republic," Central European Business Review, Prague University of Economics and Business, vol. 2014(3), pages 31-37.
    6. Hun Jun Lee & Jeong-Dong Lee & Chulwoo Baek, 2017. "Productivity dynamics and the cleansing effect of two recessions: Evidence from the manufacturing sector in Korea," Pacific Economic Review, Wiley Blackwell, vol. 22(4), pages 677-701, October.

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    Keywords

    Labor market; Manufactures;

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