IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v57y2021i3d10.1007_s11187-020-00362-8.html
   My bibliography  Save this article

Labor flows across firm size, age, and economic sector in Colombia vs. the United States

Author

Listed:
  • Luz A. Flórez

    (Researchers in the Labour Market Analysis Group, Central Bank of Colombia)

  • Leonardo Fabio Morales

    (Researchers in the Labour Market Analysis Group, Central Bank of Colombia)

  • Daniel Medina

    (Professor of Economics at Universidad EAFIT and Master student at National University, respectively)

  • José Lobo

    (Professor of Economics at Universidad EAFIT and Master student at National University, respectively)

Abstract

This paper compares labor market flows between a developing economy, Colombia, and a developed one, the United States (US). In a comparative framework, we explore measures of labor market flows across dimensions such as firm size, age, and economic sector. This comparison allows us testing, for both countries, a series of interesting hypothesis suggested in the literature, namely the negative systematic relationship between firm size/age and employment growth rate. We find that labor market fluidity in the US labor market is substantially higher than in Colombia and that the churning rate is twice as high for the US market as it is for the Colombian one. We argue that this fluidity gap between the two economies can be explained by, among other factors, the rigid nature of Colombian labour market institutions.

Suggested Citation

  • Luz A. Flórez & Leonardo Fabio Morales & Daniel Medina & José Lobo, 2021. "Labor flows across firm size, age, and economic sector in Colombia vs. the United States," Small Business Economics, Springer, vol. 57(3), pages 1569-1600, October.
    • Handle: RePEc:kap:sbusec:v:57:y:2021:i:3:d:10.1007_s11187-020-00362-8
    DOI: 10.1007/s11187-020-00362-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11187-020-00362-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11187-020-00362-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Melissa Bjelland & Bruce Fallick & John Haltiwanger & Erika McEntarfer, 2011. "Employer-to-Employer Flows in the United States: Estimates Using Linked Employer-Employee Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(4), pages 493-505, October.
    2. Henry Hyatt & James Spletzer, 2013. "The recent decline in employment dynamics," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    3. Bertola, Giuseppe & Rogerson, Richard, 1997. "Institutions and labor reallocation," European Economic Review, Elsevier, vol. 41(6), pages 1147-1171, June.
    4. Broersma, Lourens & Gautier, Pieter, 1997. "Job Creation and Job Destruction by Small Firms: An Empirical Investigation for the Dutch Manufacturing Sector," Small Business Economics, Springer, vol. 9(3), pages 211-224, June.
    5. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    6. Adriana D. Kugler & Maurice D. Kugler & Luis O. Herrera-Prada, 2017. "Do Payroll Tax Breaks Stimulate Formality? Evidence from Colombia’s Reform," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 3-40, November.
    7. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Do Employment Protections Reduce Productivity? Evidence from U.S. States," NBER Working Papers 12860, National Bureau of Economic Research, Inc.
    8. World Bank, 2018. "Doing Business 2018," World Bank Publications - Books, The World Bank Group, number 28608, December.
    9. Barry T. Hirsch & Bruce E. Kaufman & Tetyana Zelenska, 2015. "Minimum Wage Channels of Adjustment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(2), pages 199-239, April.
    10. Martina Lawless, 2014. "Age or size? Contributions to job creation," Small Business Economics, Springer, vol. 42(4), pages 815-830, April.
    11. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76, National Bureau of Economic Research, Inc.
    12. Kjell G. Salvanes, 1997. "Market Rigidities and Labour Market Flexibility: An International Comparison," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 315-333, June.
    13. Bottasso, Anna & Conti, Maurizio & Sulis, Giovanni, 2017. "Firm dynamics and employment protection: Evidence from sectoral data," Labour Economics, Elsevier, vol. 48(C), pages 35-53.
    14. Baldwin, John & Picot, Garnett, 1995. "Employment Generation by Small Producers in the Canadian Manufacturing Sector," Small Business Economics, Springer, vol. 7(4), pages 317-331, August.
    15. Bassanini, Andrea & Garnero, Andrea, 2013. "Dismissal protection and worker flows in OECD countries: Evidence from cross-country/cross-industry data," Labour Economics, Elsevier, vol. 21(C), pages 25-41.
    16. Robert Shimer, 2001. "The Impact of Young Workers on the Aggregate Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(3), pages 969-1007.
    17. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger & Ian Rucker, 2010. "Adjusted Estimates of Worker Flows and Job Openings in JOLTS," NBER Chapters, in: Labor in the New Economy, pages 187-216, National Bureau of Economic Research, Inc.
    18. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805, Elsevier.
    19. David H. Autor & John J. Donohue & Stewart J. Schwab, 2006. "The Costs of Wrongful-Discharge Laws," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 211-231, May.
    20. Boeri, Tito & Jimeno, Juan F., 2005. "The effects of employment protection: Learning from variable enforcement," European Economic Review, Elsevier, vol. 49(8), pages 2057-2077, November.
    21. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    22. Leonardo Fabio Morales & Carlos Medina, 2017. "Assessing the Effect of Payroll Taxes on Formal Employment: The Case of the 2012 Tax Reform in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 75-124, November.
    23. Burgess, Simon & Lane, Julia & Stevens, David, 2001. "Churning dynamics: an analysis of hires and separations at the employer level," Labour Economics, Elsevier, vol. 8(1), pages 1-14, January.
    24. Daniel S. Hamermesh & Wolter H. J. Hassink & Jan C. Van Ours, 1996. "Job Turnover and Labor Turnover: A taxinomy of Employment Dynamics," Annals of Economics and Statistics, GENES, issue 41-42, pages 21-40.
    25. Haltiwanger, John C. & Vodopivec, Milan, 2002. "Worker Flows, Job Flows and Firm Wage Policies: An Analysis of Slovenia," IZA Discussion Papers 569, Institute of Labor Economics (IZA).
    26. Haltiwanger, John & Scarpetta, Stefano & Schweiger, Helena, 2014. "Cross country differences in job reallocation: The role of industry, firm size and regulations," Labour Economics, Elsevier, vol. 26(C), pages 11-25.
    27. Raven Molloy & Christopher L. Smith & Riccardo Trezzi & Abigail Wozniak, 2016. "Understanding Declining Fluidity in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 183-259.
    28. Gomez-Salvador, Ramon & Messina, Julian & Vallanti, Giovanna, 2004. "Gross job flows and institutions in Europe," Labour Economics, Elsevier, vol. 11(4), pages 469-485, August.
    29. Matthew Barnes & Jonathan Haskel, 2002. "Job Creation, Job Destruction and the Contribution of Small Businesses: Evidence for UK Manufacturing," Working Papers 461, Queen Mary University of London, School of Economics and Finance.
    30. Julián Messina & Giovanna Vallanti, 2007. "Job Flow Dynamics and Firing Restrictions: Evidence from Europe," Economic Journal, Royal Economic Society, vol. 117(521), pages 279-301, June.
    31. Michaela Fuchs & Antje Weyh, 2010. "The determinants of job creation and destruction: plant-level evidence for Eastern and Western Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(4), pages 425-444, November.
    32. Ligia Alba Melo & Carlos Andrés Ballesteros, 2013. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 15(28), pages 281-311, January-J.
    33. Cristina Fernandez & Leonardo Villar, 2017. "The Impact of Lowering the Payroll Tax on Informality in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 125-155, November.
    34. Burgess, Simon & Lane, Julia & Stevens, David, 2000. "Job Flows, Worker Flows, and Churning," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 473-502, July.
    35. Edward P. Lazear & Kristin McCue, 2016. "Hires and Separations in Equilibrium," Working Papers 16-57, Center for Economic Studies, U.S. Census Bureau.
    36. Davis, Steven J & Haltiwanger, John & Schuh, Scott, 1996. "Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts," Small Business Economics, Springer, vol. 8(4), pages 297-315, August.
    37. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-938, October.
    38. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2018. "Who creates jobs and who creates productivity? Small versus large versus young versus old," Economics Letters, Elsevier, vol. 164(C), pages 50-57.
    39. John M. Abowd & Bryce E. Stephens & Lars Vilhuber & Fredrik Andersson & Kevin L. McKinney & Marc Roemer & Simon Woodcock, 2009. "The LEHD Infrastructure Files and the Creation of the Quarterly Workforce Indicators," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 149-230, National Bureau of Economic Research, Inc.
    40. Gerrit Wit & Jan Kok, 2014. "Do small businesses create more jobs? New evidence for Europe," Small Business Economics, Springer, vol. 42(2), pages 283-295, February.
    41. David Neumark & Brandon Wall & Junfu Zhang, 2011. "Do Small Businesses Create More Jobs? New Evidence for the United States from the National Establishment Time Series," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 16-29, August.
    42. Adriaan Van Stel & David Storey, 2004. "The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 893-909.
    43. repec:adr:anecst:y:1996:i:41-42:p:02 is not listed on IDEAS
    44. Leonardo Fabio Morales & José Lobo, 2017. "Estimating Vacancies from Firms’ Hiring behavior: The Case of a Developing Economy," Borradores de Economia 1017, Banco de la Republica de Colombia.
    45. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
    46. John Haltiwanger & Milan Vodopivec, 2003. "Worker flows, job flows and firm wage policies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 253-290, June.
    47. Laura Giuliano, 2013. "Minimum Wage Effects on Employment, Substitution, and the Teenage Labor Supply: Evidence from Personnel Data," Journal of Labor Economics, University of Chicago Press, vol. 31(1), pages 155-194.
    48. Steven J. Davis & R. Jason Faberman & John Haltiwanger, 2006. "The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 3-26, Summer.
    49. Leonardo Fabio Morales & Daniel Medina, 2016. "Labor Fluidity and Performance of Labor Outcomes in Colombia: Evidence from Employer-Employee Linked Panel," Borradores de Economia 14249, Banco de la Republica.
    50. Isabell Koske & Isabelle Wanner & Rosamaria Bitetti & Omar Barbiero, 2015. "The 2013 update of the OECD's database on product market regulation: Policy insights for OECD and non-OECD countries," OECD Economics Department Working Papers 1200, OECD Publishing.
    51. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, June.
    52. Leonardo Fabio Morales & Didier Hermida & Eleonora Dávalos, 2019. "Interactions between Formal and Informal Labor Dynamics: Revealing Job Flows from Household Surveys," Borradores de Economia 1090, Banco de la Republica de Colombia.
    53. Lane, Julia & Stevens, David & Burgess, Simon, 1996. "Worker and job flows," Economics Letters, Elsevier, vol. 51(1), pages 109-113, April.
    54. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    55. Morales, Leonardo Fabio & Medina, Daniel, 2019. "Fluidez del mercado laboral y resultados en materia de empleo en Colombia: evidencia derivada de datos enlazados de empleadores y empleados," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    56. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
    57. Meghana Ayyagari & Asli Demirguc-Kunt & Vojislav Maksimovic, 2014. "Who creates jobs in developing countries?," Small Business Economics, Springer, vol. 43(1), pages 75-99, June.
    58. Steven J. Davis & John Haltiwanger, 2014. "Labor Market Fluidity and Economic Performance," NBER Working Papers 20479, National Bureau of Economic Research, Inc.
    59. -, 2019. "Revista CEPAL no. 127," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    60. John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2013. "Who Creates Jobs? Small versus Large versus Young," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 347-361, May.
    61. Matthew Barnes & Jonathan Haskel, 2002. "Job Creation, Job Destruction and the Contribution of Small Businesses: Evidence for UK Manufacturing," Working Papers 461, Queen Mary University of London, School of Economics and Finance.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leonardo Fabio Morales & Leonardo Bonilla‐Mejía & Jose Pulido & Luz A. Flórez & Didier Hermida & Karen L. Pulido‐Mahecha & Francisco Lasso‐Valderrama, 2022. "Effects of the COVID‐19 pandemic on the Colombian labour market: Disentangling the effect of sector‐specific mobility restrictions," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 308-357, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luz Adriana Flórez & Leonardo Morales Z & Daniel Medina & José Lobo C, 2017. "Labour flows across firm´s size, economic sectors and wages in Colombia: evidence from employer-employee linked panel," Borradores de Economia 1013, Banco de la Republica de Colombia.
    2. Morales, Leonardo Fabio & Medina, Daniel, 2019. "Fluidez del mercado laboral y resultados en materia de empleo en Colombia: evidencia derivada de datos enlazados de empleadores y empleados," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    3. Morales, Leonardo Fabio & Medina, Daniel, 2019. "Labour market fluidity and employment outcomes in Colombia: evidence from employer-employee linked data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    4. Steven J. Davis & John Haltiwanger, 2014. "Labor Market Fluidity and Economic Performance," NBER Working Papers 20479, National Bureau of Economic Research, Inc.
    5. Leonardo Fabio Morales & Didier Hermida & Eleonora Dávalos, 2019. "Interactions between Formal and Informal Labor Dynamics: Revealing Job Flows from Household Surveys," Borradores de Economia 1090, Banco de la Republica de Colombia.
    6. Giovanna Vallanti & Giuseppina Gianfreda, 2021. "Informality, regulation and productivity: do small firms escape EPL through shadow employment?," Small Business Economics, Springer, vol. 57(3), pages 1383-1412, October.
    7. Giuseppina Gianfreda & Giovanna Vallanti, 2020. "Labor Courts and Firing Costs: The Labor‐Market Effects of Trial Delays," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 40-84, January.
    8. Leonardo Fabio Morales & Daniel Medina, 2016. "Labor Fluidity and Performance of Labor Outcomes in Colombia: Evidence from Employer-Employee Linked Panel," Borradores de Economia 14249, Banco de la Republica.
    9. Brenda Samaniego de la Parra & Andrea Otero-Cortés & Leonardo Fabio Morales, 2021. "The Labor Market Effects of Part-Time Contributions to Social Security: Evidence from Colombia," Documentos de Trabajo Sobre Economía Regional y Urbana 19702, Banco de la República, Economía Regional.
    10. Pedro S. Martins, 2009. "Dismissals for Cause: The Difference That Just Eight Paragraphs Can Make," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 257-279, April.
    11. Marcela Eslava & John C. Haltiwanger & Alvaro Pinzón, 2019. "Job creation in Colombia vs the U.S.: “up or out dynamics” meets “the life cycle of plants”," NBER Working Papers 25550, National Bureau of Economic Research, Inc.
    12. Leonardo Fabio Morales & José Lobo, 2017. "Estimating Vacancies from Firms’ Hiring behavior: The Case of a Developing Economy," Borradores de Economia 1017, Banco de la Republica de Colombia.
    13. Guertzgen, Nicole, 2007. "Job and Worker Reallocation in German Establishments: The Role of Employers? Wage Policies and Labour Market Institutions," ZEW Discussion Papers 07-084, ZEW - Leibniz Centre for European Economic Research.
    14. Umut Kılınç, 2018. "Productivity slowdown and misallocation in the post-recession: What prevents recovery?," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1542-1570, December.
    15. Giuseppina Gianfreda & Giovanna Vallanti, 2017. "Informality and productivity: do firms escape EPL through shadow employment? Evidence from a regression discontinuity design," Working Papers 2017-01, Universita' di Cassino, Dipartimento di Economia e Giurisprudenza.
    16. Nobuhiro Kiyotaki & Ricardo Lagos, 2007. "A Model of Job and Worker Flows," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 770-819, October.
    17. Federico Cingano & Marco Leonardi & Julián Messina & Giovanni Pica, 2016. "Employment Protection Legislation, Capital Investment and Access to Credit: Evidence from Italy," Economic Journal, Royal Economic Society, vol. 126(595), pages 1798-1822, September.
    18. Andrea Vindigni & Simone Scotti & Cristina Tealdi, 2015. "Uncertainty and the Politics of Employment Protection," Journal of Labor Economics, University of Chicago Press, vol. 33(1), pages 209-267.
    19. Giuseppina Gianfreda & Giovanna Vallanti, 2017. "Informality and productivity: do firms escape EPL through shadow employment? Evidence from a regression discontinuity design," Working Papers 2017-01, Universita' di Cassino, Dipartimento di Economia e Giurisprudenza.
    20. Kuhn, Johan M. & Malchow-Møller, Nikolaj & Sørensen, Anders, 2016. "Job creation and job types – New evidence from Danish entrepreneurs," European Economic Review, Elsevier, vol. 86(C), pages 161-187.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:57:y:2021:i:3:d:10.1007_s11187-020-00362-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.