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On gross worker flows in the United Kingdom: evidence from the Labour Force Survey

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  • Brian Bell
  • James Smith

Abstract

Empirical studies of worker flows in the United States and Europe have found that these flows are large when compared with the change in the stocks of employment and non-employment, and have a distinct cyclical pattern. In the United Kingdom, studies of this kind have been hampered by limitations in the available data. In this paper use is made of newly released longitudinal data from the Labour Force Survey. It is shown that, on average, since 1993 7.3% of those in the working-age population have changed labour market state in a given three-month period. This compares with a consistently calculated annual figure of 12.5%. In addition, an array of evidence is presented to show that UK gross flows appear to follow a cyclical pattern similar to those found in other countries. Evidence is also presented on the potential problems that previous research may suffer from with their use of recall data to determine prior labour market status. While stocks are similar using recall or recorded labour market state, flows inferred from recall data are severely biased by recall error.

Suggested Citation

  • Brian Bell & James Smith, 2002. "On gross worker flows in the United Kingdom: evidence from the Labour Force Survey," Bank of England working papers 160, Bank of England.
    • Handle: RePEc:boe:boeewp:160
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    References listed on IDEAS

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    Cited by:

    1. Gomes, Pedro, 2012. "Labour market flows: Facts from the United Kingdom," Labour Economics, Elsevier, vol. 19(2), pages 165-175.
    2. Hie Joo Ahn & Ling Shao, 2017. "Precautionary On-the-Job Search over the Business Cycle," Finance and Economics Discussion Series 2017-025, Board of Governors of the Federal Reserve System (U.S.).
    3. Michael W. L. Elsby & Jennifer C. Smith & Jonathan Wadsworth, 2011. "The role of worker flows in the dynamics and distribution of UK unemployment," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(2), pages 338-363.
    4. Michael W. L. Elsby & Jennifer C. Smith & Jonathan Wadsworth, 2021. "Population growth, immigration and labour market dynamics," CEP Discussion Papers dp1814, Centre for Economic Performance, LSE.
    5. Brian Bell & James Smith, 2004. "Health, disability insurance and labour force participation," Bank of England working papers 218, Bank of England.
    6. Katarzyna Budnik, 2007. "Migration Flows and Labour Market in Poland," NBP Working Papers 44, Narodowy Bank Polski.
    7. Makoto Kakinaka & Hiroaki Miyamoto, 2012. "Unemployment and labour force participation in Japan," Applied Economics Letters, Taylor & Francis Journals, vol. 19(11), pages 1039-1043, July.
    8. Robert Dixon & John Freebairn & Guay Lim, 2005. "An Examination of Net Flows in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(1), pages 25-42, March.
    9. Michael W. L. Elsby & Bart Hobijn & Ayşegül Şahin, 2013. "Unemployment Dynamics in the OECD," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 530-548, May.
    10. Zanetti, Francesco, 2011. "Labor market institutions and aggregate fluctuations in a search and matching model," European Economic Review, Elsevier, vol. 55(5), pages 644-658, June.
    11. M. K. Jones & R. J. Jones & P. L. Latreille & P. D. Murphy & P. J. Sloane, 2013. "A regional analysis of flows into and out of the UK national minimum wage," Applied Economics, Taylor & Francis Journals, vol. 45(21), pages 3074-3087, July.
    12. Robert Dixon & John Freebairn & G. C. Lim, 2004. "A Framework For Understanding Changes In The Unemployment Rate In A Flows Context: An Examination Net Flows In The Australian Labour Market," Department of Economics - Working Papers Series 910, The University of Melbourne.
    13. Andrew Sutton, 2013. "On the determinants of UK unemployment and the Great Recession: analysing the gross flows data," Applied Economics, Taylor & Francis Journals, vol. 45(25), pages 3599-3616, September.
    14. Lin, Ching-Yang & Miyamoto, Hiroaki, 2012. "Gross worker flows and unemployment dynamics in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 44-61.
    15. Robert Dixon & G. C. Lim & Jan C. van Ours, 2015. "The effect of shocks to labour market flows on unemployment and participation rates," Applied Economics, Taylor & Francis Journals, vol. 47(24), pages 2523-2539, May.
    16. Ibrahim Arisoy, 2018. "An Empirical Examination of Unemployment Invariance Hypothesis, Discouraged and Added Worker Effects in Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 8(6), pages 11-14.
    17. Ahn Hie Joo & Shao Ling, 2021. "The Cyclicality of On-the-Job Search Effort," The B.E. Journal of Macroeconomics, De Gruyter, vol. 21(1), pages 185-220, January.
    18. Bank of England, 2008. "Labor Market Institutions and Aggregate Fluctuations in a Search and Matching Model," 2008 Meeting Papers 370, Society for Economic Dynamics.
    19. Mark Schweitzer & David Tinsley, 2004. "The UK labour force participation rate: business cycle and trend influences," Bank of England working papers 228, Bank of England.
    20. Robert Dixon, 2007. "Regional Differences in the Severity of Recessions in the UK," Department of Economics - Working Papers Series 1009, The University of Melbourne.
    21. Renato Faccini & Stephen Millard & Francesco Zanetti, 2013. "Wage Rigidities in an Estimated Dynamic, Stochastic, General Equilibrium Model of the UK Labour Market," Manchester School, University of Manchester, vol. 81, pages 66-99, September.

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