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New Evidences on What Job Creation and Job Destruction Represent

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  • Carlos Henrique Corseuil
  • Hidehiko Ichimura

Abstract

An alternative measure for gross job flows, incorporating within plant job reallocation, is proposed. Based on data with detailed information about workers occupation, we report the following results: 1. Most of the stylized facts about job reallocation do not change when we take into account within plant job reallocation. 2. Job creation and job destruction figures are decomposed into job created (destructed) by new (dying) firms, job created (destructed) by existing firms by expanding (contracting) workers in existing jobs, and the jobs created (destructed) due to the birth (death) of job categories in incumbent (surviving) establishments. We call the third component as the job mix component. It turned out that the job mix component corresponds to 30% (40%) per cent of job creation (destruction). 3. Also, we describe patterns of job reallocation, and each of the components, by job characteristics as opposed to workers characteristics. The job mix component of both job creation and destruction are concentrated among non-production activities and managerial positions. 4. We interpret these results as evidence that organizational change should be considered as one of the most relevant underlying causes of the employment movements reflected by job creation and job destruction measures. 5. Finally we evaluate the relevance of specific dimensions of organizational change, such as intra-firm reallocation of job categories, outsourcing, changes in the product mix, and labor division. The results points to labor division as the most relevant dimension of organizational change among the ones considered.

Suggested Citation

  • Carlos Henrique Corseuil & Hidehiko Ichimura, 2006. "New Evidences on What Job Creation and Job Destruction Represent," Discussion papers 06023, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:06023
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    File URL: https://www.rieti.go.jp/jp/publications/dp/06e023.pdf
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    References listed on IDEAS

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    3. Eric Maurin & David Thesmar, 2004. "Changes in the Functional Structure of Firms and the Demand for Skill," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 639-664, July.
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    5. Daniel S. Hamermesh & Wolter H. J. Hassink & Jan C. van Ours, 1994. "New Facts About Factor-Demand Dynamics: Employment, Jobs, and Workers," NBER Working Papers 4625, National Bureau of Economic Research, Inc.
    6. Tor Jakob Klette & Samuel Kortum, 2004. "Innovating Firms and Aggregate Innovation," Journal of Political Economy, University of Chicago Press, vol. 112(5), pages 986-1018, October.
    7. Sherwin Rosen, 2005. "Substitution And Division Of Labour," World Scientific Book Chapters,in: An Inframarginal Approach To Trade Theory, chapter 3, pages 29-51 World Scientific Publishing Co. Pte. Ltd..
    8. Kjell G. Salvanes & Svein Erik F¯rre, 2003. "Effects on Employment of Trade and Technical Change: Evidence from Norway," Economica, London School of Economics and Political Science, vol. 70(278), pages 293-329, May.
    9. Jovanovic, B., 1993. "The Diversification of Production," Working Papers 93-11, C.V. Starr Center for Applied Economics, New York University.
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    Cited by:

    1. LIU Yang, 2017. "Wages, Job Productivity, and Job Creation and Destruction: Evidence from Japanese division-level employment data," Discussion papers 17060, Research Institute of Economy, Trade and Industry (RIETI).

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