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The cyclicality of worker flows: new evidence from the SIPP

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Author Info
Shigeru Fujita
Christopher J. Nekarda
Garey Ramey

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Abstract

Drawing on CPS data, the authors show that total monthly job loss and hiring among U.S. workers, as well as job loss hazard rates, are strongly countercyclical, while job finding hazard rates are strongly procyclical. They also find that total job loss and job loss hazard rates lead the business cycle, while total hiring and job finding rates trail the cycle. In the current paper the authors use information from the Survey on Income and Program Participation (SIPP) to reevaluate these findings. SIPP data are used to construct new longitudinally consistent gross flow series for U.S. workers, covering 1983-2003. The results strongly validate the authors' findings, with two important exceptions: (1) total hiring leads the cycle in the SIPP data, and (2) the job loss rate is substantially more volatile than the job finding rate at business cycle frequencies.

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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 07-5.

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Date of creation: 2007
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Handle: RePEc:fip:fedpwp:07-5

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Robert E. Hall, 2005. "Employment Efficiency and Sticky Wages: Evidence from Flows in the Labor Market," NBER Working Papers 11183, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March. [Downloadable!]
  3. Eran Yashiv, 2006. "U.S. Labor Market Dynamics Revisited," IZA Discussion Papers 2455, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Robert E. Hall, 2005. "Job Loss, Job Finding, and Unemployment in the U.S. Economy Over the Past Fifty Years," NBER Working Papers 11678, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Shigeru Fujita & Garey Ramey, 2006. "The cyclicality of job loss and hiring," Working Papers 06-17, Federal Reserve Bank of Philadelphia. [Downloadable!]
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  6. Michael W. Elsby & Ryan Michaels & Gary Solon, 2007. "The Ins and Outs of Cyclical Unemployment," NBER Working Papers 12853, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Shigeru Fujita & Garey Ramey, 2007. "Reassessing the Shimer facts," Working Papers 07-2, Federal Reserve Bank of Philadelphia. [Downloadable!]
  8. Solon, Gary, 1986. "Effects of Rotation Group Bias on Estimation of Unemployment," Journal of Business & Economic Statistics, American Statistical Association, vol. 4(1), pages 105-09, January.
  9. Robert E. Hall, 2005. "Employment Efficiency and Sticky Wages: Evidence from Flows in the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 397-407, October. [Downloadable!] (restricted)
  10. Abowd, John M & Zellner, Arnold, 1985. "Estimating Gross Labor-Force Flows," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 254-83, June.
  11. Robert Shimer, 2007. "Reassessing the Ins and Outs of Unemployment," NBER Working Papers 13421, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Shigeru Fujita, 2009. "Dynamics of worker flows and vacancies: evidence from the sign restriction approach," Working Papers 07-12, Federal Reserve Bank of Philadelphia. [Downloadable!]
  2. Wesselbaum, Dennis, 2009. "Firing Tax vs. Severance Payment - An Unequal Comparison," MPRA Paper 17637, University Library of Munich, Germany. [Downloadable!]
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This page was last updated on 2009-11-18.


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