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Adjusted Estimates of Worker Flows and Job Openings in JOLTS

In: Labor in the New Economy

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  • Steven J. Davis
  • R. Jason Faberman
  • John C. Haltiwanger
  • Ian Rucker

Abstract

We develop and implement a method to improve estimates of worker flows and job openings based on the Job Openings and Labor Turnover Survey (JOLTS). Our method involves reweighting the cross-sectional density of employment growth rates in JOLTS to match the corresponding density in the comprehensive Business Employment Dynamics (BED) data. To motivate our work, we compare JOLTS to other data sources and document large discrepancies with respect to aggregate employment growth, the magnitude of worker flows, and the cross-sectional density of establishment growth rates. We also discuss issues related to JOLTS sample design and nonresponse corrections. Our adjusted statistics for hires and separations exceed the published statistics by about one-third. The adjusted layoff rate is more than 60 percent greater than the published layoff rate. Time-series properties are also affected. For example, hires exhibit more volatility than separations in the published statistics, but the reverse holds in the adjusted statistics. The impact of our adjustment methodology on estimated job openings is more modest, raising the vacancy rate by about 8 percent.

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This chapter was published in:

  • Katharine G. Abraham & James R. Spletzer & Michael Harper, 2010. "Labor in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number abra08-1.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 10820.

    Handle: RePEc:nbr:nberch:10820

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. R. Jason Faberman, 2009. "Studying the Labor Market with the Job Openings and Labor Turnover Survey," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 83-108 National Bureau of Economic Research, Inc.
    2. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2009. "The establishment-level behavior of vacancies and hiring," Working Papers 09-14, Federal Reserve Bank of Philadelphia.
    3. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 25-49, March.
    4. Jacob Mincer & Boyan Jovanovic, 1979. "Labor Mobility and Wages," NBER Working Papers 0357, National Bureau of Economic Research, Inc.
    5. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
    6. Mark Gertler & Antonella Trigari, 2009. "Unemployment Fluctuations with Staggered Nash Wage Bargaining," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 117(1), pages 38-86, 02.
    7. Ramey, Garey & Fujita, Shigeru, 2006. "Job Matching and Propagation," University of California at San Diego, Economics Working Paper Series, Department of Economics, UC San Diego qt53s671h7, Department of Economics, UC San Diego.
    8. Steven J. Davis & R. Jason Faberman & John Haltiwanger, 2006. "The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links," NBER Working Papers 12167, National Bureau of Economic Research, Inc.
    9. Hagedorn, Marcus & Manovskii, Iourii, 2008. "The cyclical behavior of equilibrium unemployment and vacancies revisited," Working Paper Series, European Central Bank 0853, European Central Bank.
    10. Robert Shimer, 2007. "Reassessing the Ins and Outs of Unemployment," NBER Working Papers 13421, National Bureau of Economic Research, Inc.
    11. Steven J. Davis & John Haltiwanger & Ron S. Jarmin & C. J. Krizan & Javier Miranda & Alfred Nucci & Kristin Sandusky, 2007. "Measuring the Dynamics of Young and Small Businesses: Integrating the Employer and Nonemployer Universes," NBER Working Papers 13226, National Bureau of Economic Research, Inc.
    12. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262540932, December.
    13. Eva Nagypal & R. Jason Faberman, 2007. "The Effect of Quits on Worker Recruitment: Theory and Evidence," 2007 Meeting Papers, Society for Economic Dynamics 780, Society for Economic Dynamics.
    14. R. Jason Faberman, 2006. "Job Flows and the Recent Business Cycle: Not All "Recoveries" Are Created Equal," Working Papers, U.S. Bureau of Labor Statistics 391, U.S. Bureau of Labor Statistics.
    15. Bruce Fallick & Charles A. Fleischman, 2004. "Employer-to-employer flows in the U.S. labor market: the complete picture of gross worker flows," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2004-34, Board of Governors of the Federal Reserve System (U.S.).
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    Cited by:
    1. Abowd, John M. & Vilhuber, Lars, 2011. "National estimates of gross employment and job flows from the Quarterly Workforce Indicators with demographic and industry detail," Journal of Econometrics, Elsevier, Elsevier, vol. 161(1), pages 82-99, March.
    2. Mário Centeno & Álvaro A. Novo & Carla Machado, 2008. "The Anatomy of Employment Growth in Portuguese Firms," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department, Banco de Portugal, Economics and Research Department.
    3. R. Jason Faberman & John Haltiwanger & Steven J. Davis, 2010. "Labor Market Flows and Vacancies in the Cross Section and Over Time," 2010 Meeting Papers, Society for Economic Dynamics 1045, Society for Economic Dynamics.
    4. Davis, Steven J. & Faberman, R. Jason & Haltiwanger, John, 2012. "Labor market flows in the cross section and over time," Journal of Monetary Economics, Elsevier, Elsevier, vol. 59(1), pages 1-18.
    5. Kaas, Leo & Kircher, Philipp, 2011. "Efficient Firm Dynamics in a Frictional Labor Market," IZA Discussion Papers 5452, Institute for the Study of Labor (IZA).
    6. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2013. "The Establishment-Level Behavior of Vacancies and Hiring," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 581-622.
    7. Centeno, Mario & Novo, Alvaro A., 2011. "Excess Worker Turnover and Fixed-Term Contracts: Causal Evidence in a Two-Tier System," IZA Discussion Papers 6239, Institute for the Study of Labor (IZA).
    8. Steven J. Davis & Till Von Wachter, 2011. "Recessions and the Costs of Job Loss," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 43(2 (Fall)), pages 1-72.
    9. Bart Hobijn, 2012. "The industry-occupation mix of U.S. job openings and hires," Working Paper Series, Federal Reserve Bank of San Francisco 2012-09, Federal Reserve Bank of San Francisco.
    10. Centeno, Mario & Machado, Carla & Novo, Alvaro A., 2009. "Excess Turnover and Employment Growth: Firm and Match Heterogeneity," IZA Discussion Papers 4586, Institute for the Study of Labor (IZA).
    11. Didem Tuzemen, 2012. "Labor market dynamics with endogenous labor force participation and on-the-job search," Research Working Paper, Federal Reserve Bank of Kansas City RWP 12-07, Federal Reserve Bank of Kansas City.

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