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The Entry and Exit of Workers and the Growth of Employment: An Analysis of French Establishments

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  • John M. Abowd
  • Patrick Corbel
  • Francis Kramarz

Abstract

Our empirical analyses distinguish between flows of workers, directly measured, and job creation and destruction, again, directly measured. We use a representative sample of all French establishments for 1987 to 1990. Our most important findings are that (1) annual job creation can be characterized as hiring three persons and separating two for each job created in a given year; (2) annual job destruction can be characterized as hiring one person and separating two for each job destroyed in a given year; (3) two-thirds of all hiring are short term contracts and more than half of all separations are due to the end of these short term contracts; (4) when an establishment is shrinking the adjustment is made by reducing entry (short and long contracts, and transfers) and not changing the separation rates; (5) for the highest skill groups ten percent of months with firm-initiated exits also have new hiring in the same skill group and for the lowest skill groups 25% of the months with firm-initiated separations also have new hiring in that skill group; (6) approximately one-third of all short-term employment contracts are converted to long-term contracts at their termination; (7) most worker flows are procyclical; (8) employment adjustment occurs primarily through changes in the entry rates (often of short-term contract workers) and not through the exit rates (except for quits); and (9) the rate of internal promotion into higher skilled positions is about three times the size of net employment changes inside the job category.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5551.

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Date of creation: Apr 1996
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Publication status: published as Review of Economics and Statistics, Vol. 81, no. 2 (May 1999): 170-187.
Handle: RePEc:nbr:nberwo:5551

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  1. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262540932, December.
  2. Steven J. Davis & John Haltiwanger, 1995. "Measuring Gross Worker and Job Flows," NBER Working Papers 5133, National Bureau of Economic Research, Inc.
  3. Steve J. Davis & John Haltiwanger, 1991. "Gross Job Creation, Gross Job Destruction and Employment Reallocation," NBER Working Papers 3728, National Bureau of Economic Research, Inc.
  4. Simon Burgess & Julia Lane & David Stevens, 1996. "Job Flows, Worker Flows and Churning," Labor and Demography, EconWPA 9604004, EconWPA.
  5. Hamermesh, Daniel S. & Hassink, Wolter H.J. & Ours, Jan C. van, 1994. "Job turnover and labor turnover : a taxonomy of employment dynamics," Serie Research Memoranda, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics 0050, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  6. Dunne, T. & Roberts, M.J. & Samuelson L., 1988. "Plant Turnover And Gross Employment Flows In The U.S. Manufacturing Sector," Papers, Pennsylvania State - Department of Economics 9-87-7, Pennsylvania State - Department of Economics.
  7. 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.
  8. Jonathan S. Leonard, 1986. "In the Wrong Place at the Wrong Time: The Extent of Frictional and Structural Unemployment," NBER Working Papers 1979, National Bureau of Economic Research, Inc.
  9. Anne Sérandon & Denis Fougère & Liliane Bonnal, 1994. "L'impact des dispositifs d'emploi sur le devenir des jeunes chômeurs : une évaluation économétrique sur données longitudinales," Économie et Prévision, Programme National Persée, Programme National Persée, vol. 115(4), pages 1-28.
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