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On gross worker flows in the United Kingdom: evidence from the Labour Force Survey

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  • Brian Bell
  • James Smith

Abstract

Empirical studies of worker flows in the United States and Europe have found that these flows are large when compared with the change in the stocks of employment and non-employment, and have a distinct cyclical pattern. In the United Kingdom, studies of this kind have been hampered by limitations in the available data. In this paper use is made of newly released longitudinal data from the Labour Force Survey. It is shown that, on average, since 1993 7.3% of those in the working-age population have changed labour market state in a given three-month period. This compares with a consistently calculated annual figure of 12.5%. In addition, an array of evidence is presented to show that UK gross flows appear to follow a cyclical pattern similar to those found in other countries. Evidence is also presented on the potential problems that previous research may suffer from with their use of recall data to determine prior labour market status. While stocks are similar using recall or recorded labour market state, flows inferred from recall data are severely biased by recall error.

Suggested Citation

  • Brian Bell & James Smith, 2002. "On gross worker flows in the United Kingdom: evidence from the Labour Force Survey," Bank of England working papers 160, Bank of England.
  • Handle: RePEc:boe:boeewp:160
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    File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/2002/wp160.pdf
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    References listed on IDEAS

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    3. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
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    6. Schmidt, Christoph M., 1999. "Persistence and the German Unemployment Problem: Empirical Evidences on German Labor Market Flows," IZA Discussion Papers 31, Institute for the Study of Labor (IZA).
    7. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    8. Abowd, John M & Zellner, Arnold, 1985. "Estimating Gross Labor-Force Flows," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 254-283, June.
    9. Hoyt Bleakley & Ann E. Ferris & Jeffrey C. Fuhrer, 1999. "New data on worker flows during business cycles," New England Economic Review, Federal Reserve Bank of Boston, issue Jul, pages 49-76.
    10. Burgess, Simon & Turon, Helene, 2000. "Unemployment dynamics, duration and equilibrium: evidence from Britain," LSE Research Online Documents on Economics 20162, London School of Economics and Political Science, LSE Library.
    11. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters,in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Gomes, Pedro, 2012. "Labour market flows: Facts from the United Kingdom," Labour Economics, Elsevier, vol. 19(2), pages 165-175.
    2. Brian Bell & James Smith, 2004. "Health, disability insurance and labour force participation," Bank of England working papers 218, Bank of England.
    3. Katarzyna Budnik, 2007. "Migration Flows and Labour Market in Poland," NBP Working Papers 44, Narodowy Bank Polski, Economic Research Department.
    4. Makoto Kakinaka & Hiroaki Miyamoto, 2012. "Unemployment and labour force participation in Japan," Applied Economics Letters, Taylor & Francis Journals, vol. 19(11), pages 1039-1043, July.
    5. Michael W. L. Elsby & Bart Hobijn & Ayşegül Şahin, 2013. "Unemployment Dynamics in the OECD," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 530-548, May.
    6. Zanetti, Francesco, 2011. "Labor market institutions and aggregate fluctuations in a search and matching model," European Economic Review, Elsevier, vol. 55(5), pages 644-658, June.
    7. Robert Dixon & John Freebairn & G. C. Lim, 2004. "A Framework For Understanding Changes In The Unemployment Rate In A Flows Context: An Examination Net Flows In The Australian Labour Market," Department of Economics - Working Papers Series 910, The University of Melbourne.
    8. Lin, Ching-Yang & Miyamoto, Hiroaki, 2012. "Gross worker flows and unemployment dynamics in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 44-61.
    9. Robert Dixon & G. C. Lim & Jan C. van Ours, 2015. "The effect of shocks to labour market flows on unemployment and participation rates," Applied Economics, Taylor & Francis Journals, vol. 47(24), pages 2523-2539, May.
    10. Mark Schweitzer & David Tinsley, 2004. "The UK labour force participation rate: business cycle and trend influences," Bank of England working papers 228, Bank of England.
    11. Robert Dixon, 2007. "Regional Differences in the Severity of Recessions in the UK," Department of Economics - Working Papers Series 1009, The University of Melbourne.

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