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

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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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  • Andrew Figura, 2002. "Is reallocation related to the cycle? A look at permanent and temporary job flows," Finance and Economics Discussion Series 2002-16, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2002-16
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    Cited by:

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    2. 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.).
    3. Böheim, René & Stiglbauer, Alfred M. & Winter-Ebmer, Rudolf, 2005. "When and How to Create a Job: The Survival of New Jobs in Austrian Firms," IZA Discussion Papers 1602, Institute of Labor Economics (IZA).
    4. Daniel Aaronson & Ellen R. Rissman & Daniel G. Sullivan, 2004. "Can sectoral reallocation explain the jobless recovery?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 28(Q II), pages 36-39.
    5. Lucia Alessi & Matteo Barigozzi & Marco Capasso, 2006. "A Dynamic Factor Analysis of Business Cycle on Firm-Level Data," LEM Papers Series 2006/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Alcaraz Carlo & García Verdú Rodrigo, 2006. "Changes in the Composition of Employment and Productivity in the Formal Sector of the Mexican Economy," Working Papers 2006-03, Banco de México.
    7. Böheim, René & Stiglbauer, Alfred & Winter-Ebmer, Rudolf, 2005. "On the Persistence of Firm Expansion. The survival of new jobs in Austrian firms," Economics Series 173, Institute for Advanced Studies.
    8. 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.).

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    Keywords

    Employment (Economic theory); Business cycles;

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