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Relationships that Last: Job Creation vs Job Duration

Author

Listed:
  • Britta Gehrke

    (Universitat Rostock & IAB)

  • Jacob Wong

    (School of Economics, University of Adelaide)

Abstract

This paper documents observations about the duration of jobs created by establishments at various points along an establishment age curve. Using an employer-employee matched dataset from Germany, we observe a checkmark-shaped relationship between expected job duration and establishment age at the time of job creation. A simple frictional labour market model with two-sided heterogeneity featuring on-the-job search, a simple learning mechanism about worker ability and a life cycle productivity profile for firms is built to frame a discussion around the empirical finding. The model's mechanical job-ladder is shown to be able to produce such stylized correlations.

Suggested Citation

  • Britta Gehrke & Jacob Wong, 2021. "Relationships that Last: Job Creation vs Job Duration," School of Economics and Public Policy Working Papers 2021-01, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2021-01
    as

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    File URL: https://media.adelaide.edu.au/economics/papers/doc/wp2021-01.pdf
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    References listed on IDEAS

    as
    1. Carlos Carrillo-Tudela & Hermann Gartner & Leo Kaas, 2023. "Recruitment Policies, Job-Filling Rates, and Matching Efficiency," Journal of the European Economic Association, European Economic Association, vol. 21(6), pages 2413-2459.
    2. Manuel Adelino & Song Ma & David Robinson, 2017. "Firm Age, Investment Opportunities, and Job Creation," Journal of Finance, American Finance Association, vol. 72(3), pages 999-1038, June.
    3. Tanja Hethey-Maier & Johannes F. Schmieder, 2013. "Does the Use of Worker Flows Improve the Analysis of Establishment Turnover? Evidence from German Administrative Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 133(4), pages 477-510.
    4. Ronald Bachmann, 2005. "Labour Market Dynamics in Germany: Hirings, Separations, and Job-to-Job Transitions over the Business Cycle," SFB 649 Discussion Papers SFB649DP2005-045, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    5. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    job duration; firm age; frictional labour markets;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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