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Adjusted Estimates of Worker Flows and Job Openings in JOLTS

In: Labor in the New Economy

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  • Steven J. Davis
  • R. Jason Faberman
  • John C. Haltiwanger
  • Ian Rucker

Abstract

We develop and implement a method to improve estimates of worker flows and job openings based on the Job Openings and Labor Turnover Survey (JOLTS). Our method involves reweighting the cross-sectional density of employment growth rates in JOLTS to match the corresponding density in the comprehensive Business Employment Dynamics (BED) data. To motivate our work, we compare JOLTS to other data sources and document large discrepancies with respect to aggregate employment growth, the magnitude of worker flows, and the cross-sectional density of establishment growth rates. We also discuss issues related to JOLTS sample design and nonresponse corrections. Our adjusted statistics for hires and separations exceed the published statistics by about one-third. The adjusted layoff rate is more than 60 percent greater than the published layoff rate. Time-series properties are also affected. For example, hires exhibit more volatility than separations in the published statistics, but the reverse holds in the adjusted statistics. The impact of our adjustment methodology on estimated job openings is more modest, raising the vacancy rate by about 8 percent.
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Suggested Citation

  • Steven J. Davis & R. Jason Faberman & John C. Haltiwanger & Ian Rucker, 2010. "Adjusted Estimates of Worker Flows and Job Openings in JOLTS," NBER Chapters,in: Labor in the New Economy, pages 187-216 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:10820
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    References listed on IDEAS

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    1. Marcus Hagedorn & Iourii Manovskii, 2008. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited," American Economic Review, American Economic Association, pages 1692-1706.
    2. R. Jason Faberman, 2009. "Studying the Labor Market with the Job Openings and Labor Turnover Survey," NBER Chapters,in: Producer Dynamics: New Evidence from Micro Data, pages 83-108 National Bureau of Economic Research, Inc.
    3. 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, January.
    4. Marcus Hagedorn & Iourii Manovskii, 2008. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited," American Economic Review, American Economic Association, pages 1692-1706.
    5. Eva Nagypal & R. Jason Faberman, 2007. "The Effect of Quits on Worker Recruitment: Theory and Evidence," 2007 Meeting Papers 780, Society for Economic Dynamics.
    6. Fujita, Shigeru & Ramey, Garey, 2007. "Job matching and propagation," Journal of Economic Dynamics and Control, Elsevier, pages 3671-3698.
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    8. Mark Gertler & Antonella Trigari, 2006. "Unemployment fluctuations with staggered Nash wage bargaining," Proceedings, Federal Reserve Bank of San Francisco.
    9. R. Jason Faberman, 2006. "Job Flows and the Recent Business Cycle: Not All "Recoveries" Are Created Equal," Working Papers 391, U.S. Bureau of Labor Statistics.
    10. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2013. "The Establishment-Level Behavior of Vacancies and Hiring," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 581-622.
    11. Mark Gertler & Antonella Trigari, 2009. "Unemployment Fluctuations with Staggered Nash Wage Bargaining," Journal of Political Economy, University of Chicago Press, pages 38-86.
    12. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
    13. Steven J. Davis & John Haltiwanger & Ronald S. Jarmin & C.J. Krizan & Javier Miranda & Alfred Nucci & Kristin Sandusky, 2009. "Measuring the Dynamics of Young and Small Businesses: Integrating the Employer and Nonemployer Universes," NBER Chapters,in: Producer Dynamics: New Evidence from Micro Data, pages 329-366 National Bureau of Economic Research, Inc.
    14. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
    15. Bruce C. 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.).
    16. Steven J. Davis & R. Jason Faberman & John Haltiwanger, 2006. "The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links," Journal of Economic Perspectives, American Economic Association, pages 3-26.
    17. Jacob Mincer & Boyan Jovanovic, 1981. "Labor Mobility and Wages," NBER Chapters,in: Studies in Labor Markets, pages 21-64 National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, pages 97-113.
    2. Leo Kaas & Philipp Kircher, 2015. "Efficient Firm Dynamics in a Frictional Labor Market," American Economic Review, American Economic Association, pages 3030-3060.
    3. Jason D. Hartline & Brendan Lucier, 2015. "Non-optimal Mechanism Design," American Economic Review, American Economic Association, pages 3102-3124.
    4. Davis, Steven J. & Faberman, R. Jason & Haltiwanger, John, 2012. "Labor market flows in the cross section and over time," Journal of Monetary Economics, Elsevier, pages 1-18.
    5. Leo Kaas & Carlos Carrillo-Tudela, 2015. "Worker Mobility in a Search Model with Adverse Selection," 2015 Meeting Papers 351, Society for Economic Dynamics.
    6. Steven J. Davis & Till Von Wachter, 2011. "Recessions and the Costs of Job Loss," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 1-72.
    7. R. Jason Faberman & John Haltiwanger & Steven J. Davis, 2010. "Labor Market Flows and Vacancies in the Cross Section and Over Time," 2010 Meeting Papers 1045, Society for Economic Dynamics.
    8. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2013. "The Establishment-Level Behavior of Vacancies and Hiring," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 581-622.
    9. Centeno, Mario & Machado, Carla & Novo, Alvaro A., 2009. "Excess Turnover and Employment Growth: Firm and Match Heterogeneity," IZA Discussion Papers 4586, Institute for the Study of Labor (IZA).
    10. Carrillo-Tudela, Carlos & Kaas, Leo, 2015. "Worker mobility in a search model with adverse selection," Journal of Economic Theory, Elsevier, vol. 160(C), pages 340-386.
    11. Abowd, John M. & Vilhuber, Lars, 2011. "National estimates of gross employment and job flows from the Quarterly Workforce Indicators with demographic and industry detail," Journal of Econometrics, Elsevier, pages 82-99.
    12. Luz Adriana Flórez & Leonardo Morales Z & Daniel Medina & José Lobo C, 2017. "Labour flows across firm´s size, economic sectors and wages: evidence from employer-employee linked panel," Borradores de Economia 1013, Banco de la Republica de Colombia.
    13. Didem Tuzemen, 2012. "Labor market dynamics with endogenous labor force participation and on-the-job search," Research Working Paper RWP 12-07, Federal Reserve Bank of Kansas City.
    14. Mário Centeno & Álvaro A. Novo & Carla Machado, 2008. "The Anatomy of Employment Growth in Portuguese Firms," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
    15. Nicolas Petrosky-Nadeau & Etienne Wasmer, "undated". "Macroeconomic Dynamics in a Model of Goods, Labor and Credit Market Frictions," GSIA Working Papers 2011-E6, Carnegie Mellon University, Tepper School of Business.
    16. Centeno, Mário & Novo, Álvaro A., 2012. "Excess worker turnover and fixed-term contracts: Causal evidence in a two-tier system," Labour Economics, Elsevier, vol. 19(3), pages 320-328.
    17. Davis, Steven J. & Faberman, R. Jason & Haltiwanger, John, 2012. "Labor market flows in the cross section and over time," Journal of Monetary Economics, Elsevier, pages 1-18.
    18. Bart Hobijn, 2012. "The industry-occupation mix of U.S. job openings and hires," Working Paper Series 2012-09, Federal Reserve Bank of San Francisco.
    19. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, pages 97-113.
    20. Petrosky-Nadeau, Nicolas & Wasmer, Etienne, 2015. "Macroeconomic dynamics in a model of goods, labor, and credit market frictions," Journal of Monetary Economics, Elsevier, pages 97-113.
    21. Henry R. Hyatt & James R. Spletzer, 2014. "Hires, Separations, And The Job Tenure Distribution In Administrative Earnings Records," Working Papers 14-29, Center for Economic Studies, U.S. Census Bureau.
    22. Gavazza, Alessandro & Mongey, Simon & Violante, Giovanni L, 2017. "Aggregate recruiting intensity," LSE Research Online Documents on Economics 85652, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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