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Job Reallocation and Average Job Tenure: Theory and Workplace Evidence From Australia

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  • Karen Mumford
  • Peter N. Smith

Abstract

We explore determinants of job reallocation and the implications for employment change and average job tenure in this paper. A model which associates technological advances with the process of economic growth is modified and analysed. Data on average job tenure within workplaces and gross job flows across workplaces in Australia are constructed by us from a single panel of workplace data and examined. Substantial simultaneous job creation and destruction are found in a year of strong job growth, suggesting that workplace heterogeneity is an important feature of the Australian labour market. The predictions generated from the theoretical model are examined with the data for job flows and average job tenure. Our results support the key features of the model.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 00/01.

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Handle: RePEc:yor:yorken:00/01

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Keywords: labour market flows; job reallocation; creative-destruction; average-tenure;

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  1. John Haltiwanger & Marilyn E. Manser & Robert Topel, 1998. "Labor Statistics Measurement Issues," NBER Books, National Bureau of Economic Research, Inc, number halt98-1.
  2. Steve Dowrick & Karen Mumford, 1990. "Wage Bargaining with Endogenous Profits, Overtime Working and Heterogeneous Labor," Working Papers 657, Princeton University, Department of Economics, Industrial Relations Section..
  3. 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.
  4. Christopher L. Foote, 1997. "The Surprising Symmetry of Gross Job Flows," NBER Working Papers 6226, National Bureau of Economic Research, Inc.
  5. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August.
  6. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
  7. Boeri, Tito, 1996. "Is Job Turnover Countercyclical?," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 603-25, October.
  8. Borland, Jeff, 1996. "Job Creation and Job Destruction in Manufacturing Industry in Australia," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 46-62, March.
  9. Caballero, R.J. & Hammour, M.L., 1991. "The Cleansing Effect of Recessions," Discussion Papers 1991_59, Columbia University, Department of Economics.
  10. Dale T. Mortensen & Christopher A. Pissarides, 1998. "Technological Progress, Job Creation and Job Destruction," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(4), pages 733-753, October.
  11. Ricardo J. Caballero & Mohamad L. Hammour, 1994. "On the Timing and Efficiency of Creative Destruction," NBER Working Papers 4768, National Bureau of Economic Research, Inc.
  12. Steven J. Davis & John Haltiwanger, 1995. "Measuring Gross Worker and Job Flows," NBER Working Papers 5133, National Bureau of Economic Research, Inc.
  13. Aghion, Philippe & Howitt, Peter, 1991. "Growth and Unemployment," CEPR Discussion Papers 577, C.E.P.R. Discussion Papers.
  14. Burda, Michael C & Wyplosz, Charles, 1993. "Gross Worker and Job Flows in Europe," CEPR Discussion Papers 868, C.E.P.R. Discussion Papers.
  15. Konings, Jozef, 1995. "Job Creation and Job Destruction in the UK Manufacturing Sector," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 5-24, February.
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