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Job Flows and the Recent Business Cycle: Not All "Recoveries" Are Created Equal

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  • R. Jason Faberman

    ()
    (U.S. Bureau of Labor Statistics)

Abstract

The last two economic downturns are notable for their slow labor market recoveries. Yet, the behavior of their underlying gross job flows is quite different. The 1990-92 period had a relatively slow decline in job destruction, while the 2001-03 period had a large, persistent decline in job creation that occurs across most industries. The dynamics of the latter period run counter to the conventional wisdom that large movements in job destruction drive business cycles. Evidence spanning the entire postwar period suggests that job creation is at a historic low, and that its recent patterns are part of decades-long decline in the magnitude and volatility of job reallocation.

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Bibliographic Info

Paper provided by U.S. Bureau of Labor Statistics in its series Working Papers with number 391.

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Length: 33 pages
Date of creation: Feb 2006
Date of revision:
Handle: RePEc:bls:wpaper:ec060030

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Keywords: Job Reallocation; Business Cycles; Employment Fluctuations;

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  1. John Baldwin & Timothy Dunne & John Haltiwanger, 1994. "A Comparison of Job Creation and Job Destruction in Canada and the United States," NBER Working Papers 4726, National Bureau of Economic Research, Inc.
  2. Daniel Aaronson & Ellen Rissman & Daniel G. Sullivan, 2004. "Can sectoral reallocation explain the jobless recovery?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 36-39.
  3. Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186 National Bureau of Economic Research, Inc.
  4. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
  5. 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.
  6. 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 2004-34, Board of Governors of the Federal Reserve System (U.S.).
  7. Christopher L. Foote, 1998. "Trend Employment Growth and the Bunching of Job Creation and Destruction," Harvard Institute of Economic Research Working Papers 1818, Harvard - Institute of Economic Research.
  8. Diego Comin & Thomas Philippon, 2005. "The Rise in Firm-Level Volatility: Causes and Consequences," NBER Working Papers 11388, National Bureau of Economic Research, Inc.
  9. Olivier Blanchard & John Simon, 2001. "The Long and Large Decline in U.S. Output Volatility," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 135-174.
  10. Randall W. Eberts & Edward Montgomery, 1995. "Cyclical versus Secular Movements in Employment Creation and Destruction," NBER Working Papers 5162, National Bureau of Economic Research, Inc.
  11. Erica L. Groshen & Simon Potter, 2003. "Has structural change contributed to a jobless recovery?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Aug).
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Cited by:
  1. Lustig, Hanno & Syverson, Chad & Van Nieuwerburgh, Stijn, 2011. "Technological change and the growing inequality in managerial compensation," Journal of Financial Economics, Elsevier, vol. 99(3), pages 601-627, March.
  2. Steven J. Davis & R. Jason Faberman & John Haltiwanger & Ron Jarmin & Javier Miranda, 2010. "Business Volatility, Job Destruction, and Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 259-87, April.
  3. G. Gallipoli & G. Pelloni, 2013. "Macroeconomic Effects of Job Reallocations: A Survey," Working Papers wp897, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. Almut Balleer, 2012. "New evidence, old puzzles: Technology shocks and labor market dynamics," Quantitative Economics, Econometric Society, vol. 3(3), pages 363-392, November.
  5. 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.
  6. Stephen Davis & John Haltiwanger & Ron Jarmin & Javier Miranda, 2006. "Volatility and Dispersion in Business Growth Rates: Publicly Traded Versus Privately Held Firms," Working Papers 06-17, Center for Economic Studies, U.S. Census Bureau.
  7. Tsou, Meng-Wen & Liu, Jin-Tan, 2008. "Age-specific job flows and worker flows using a national dataset," Economics Letters, Elsevier, vol. 99(2), pages 398-401, May.
  8. Lucia Foster & John Haltiwanger & Namsuk Kim, 2006. "Gross Job Flows for the U.S. Manufacturing Sector: Measurement from the Longitudinal Research Database," Working Papers 06-30, Center for Economic Studies, U.S. Census Bureau.
  9. 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.
  10. Christopher Reicher, 2009. "What Can a New Keynesian Labor Matching Model Match?," Kiel Working Papers 1496, Kiel Institute for the World Economy.

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