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Is reallocation related to the cycle? A look at permanent and temporary job flows

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  • Andrew Figura
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    Abstract

    How much of aggregate employment fluctuations is due to plants destroying and then recreating the same jobs over the cycle and how much is due to some plants permanently destroying jobs in a recession and other plants permanently creating jobs in an expansion? This paper decomposes plant level job flows into permanent and temporary components to answer this question, and finds that the permanent reallocation of jobs across plants accounts for approximately 30 percent of the cyclical fluctuations in aggregate employment.

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    Bibliographic Info

    Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2002-16.

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    Date of creation: 2002
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    Handle: RePEc:fip:fedgfe:2002-16

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    Related research

    Keywords: Employment (Economic theory) ; Business cycles;

    This paper has been announced in the following NEP Reports:

    References

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    22. 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.
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    Cited by:
    1. Carlo Alcaraz & Rodrigo García Verdú, 2006. "Changes in the Composition of Employment and Productivity in the Formal Sector of the Mexican Economy," Working Papers 2006-03, Banco de México.
    2. 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.).
    3. Andrew Figura, 2003. "The effect of restructuring on unemployment," Finance and Economics Discussion Series 2003-56, Board of Governors of the Federal Reserve System (U.S.).

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