IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp7672.html
   My bibliography  Save this paper

Does the Use of Worker Flows Improve the Analysis of Establishment Turnover? Evidence from German Administrative Data

Author

Listed:
  • Hethey-Maier, Tanja

    () (Institute for Employment Research (IAB), Nuremberg)

  • Schmieder, Johannes F.

    () (Boston University)

Abstract

Economists have long been interested in analyzing entries and exits of establishments. In many countries administrative datasets provide an excellent source for detailed analysis on a fine and disaggregate level. However, administrative datasets are not without problems: restructuring and relabeling of firms is often poorly measured and can potentially create large biases. Information on worker flows between establishments can potentially alleviate these measurement issues, but it is typically hard to judge how well correction algorithms based on this methodology work. This paper evaluates the use of the worker flow methodology using a dataset from Germany, the Establishment History Panel (BHP), merged to information on all worker flows between establishment IDs and survey data. We first document the extent of misclassification that stems from relying solely on the first and last appearance of the establishment identifier (EID) to identify openings and closings. We show that the misclassification bias of using only the EID is very severe: Only about 35 to 40 percent of new and disappearing EIDs with more than 3 employees are likely to correspond to real establishment entries and exits. Among larger establishments misclassification is even more common. We provide 3 pieces of evidence that using a classification system based on worker flows is superior to using EIDs only: First, establishment birth years generated using the worker flow methodology is much higher correlated with establishment birth years from an independent survey. Second, establishment entries and exits which are identified using the worker flow methodology move closely with the business cycle, while events which are identified as simple ID changes are not. Third, establishment exits have a big negative impact on workers' earnings trajectories which is not present for ID changes.

Suggested Citation

  • Hethey-Maier, Tanja & Schmieder, Johannes F., 2013. "Does the Use of Worker Flows Improve the Analysis of Establishment Turnover? Evidence from German Administrative Data," IZA Discussion Papers 7672, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7672
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp7672.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lars Vilhuber, 2009. "Adjusting Imperfect Data: Overview and Case Studies," NBER Chapters,in: The Structure of Wages: An International Comparison, pages 59-80 National Bureau of Economic Research, Inc.
    2. Brixy, Udo, 2008. "Welche Betriebe werden verlagert? : Beweggründe und Bedeutung von Betriebsverlagerungen in Deutschland," IAB Discussion Paper 200839, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2005. "Comparative analysis of firm demographics and survival: evidence from micro-level sources in OECD countries," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 365-391, June.
    4. Teresa C Fort & John Haltiwanger & Ron S Jarmin & Javier Miranda, 2013. "How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 520-559, August.
    5. Bauer, Thomas K. & Schmucker, Alexandra & Vorell, Mathias, 2008. "KMU und Arbeitsplatzdynamik : eine Analyse auf Basis der Beschäftigten-Historik-Datei," IAB Discussion Paper 200802, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Abowd, John M. & Vilhuber, Lars, 2005. "The Sensitivity of Economic Statistics to Coding Errors in Personal Identifiers," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 133-152, April.
    7. Lucia Foster & Cheryl Grim & John Haltiwanger, 2016. "Reallocation in the Great Recession: Cleansing or Not?," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 293-331.
    8. Benedetto, Gary & Haltiwanger, John & Lane, Julia & McKinney, Kevin, 2007. "Using Worker Flows to Measure Firm Dynamics," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 299-313, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel Fackler & Claus Schnabel & Alexandra Schmucker, 2016. "Spinoffs in Germany: characteristics, survival, and the role of their parents," Small Business Economics, Springer, vol. 46(1), pages 93-114, January.
    2. vom Berge, Philipp & Schmillen, Achim, 2015. "Direct and indirect effects of mass layoffs : evidence from geo-referenced data," IAB Discussion Paper 201511, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Fackler, Daniel & Müller, Steffen & Stegmaier, Jens, 2016. "Plant-level employment development before collective displacements: Comparing mass layoffs, plant closures, and bankruptcies," IWH Discussion Papers 27/2016, Halle Institute for Economic Research (IWH).
    4. Eliason, Marcus & Hensvik, Lena & Kramarz, Francis & Nordstrom Skans, Oskar, 2017. "The Causal Impact of Social Connections on Firms' Outcomes," CEPR Discussion Papers 12135, C.E.P.R. Discussion Papers.
    5. Thomas Brenner & Matthias Dorner, 2015. "The Cyclical Dynamics of Industries in West Germany- Testing the Industry Life Cycle Hypothesis," Papers on Economics and Evolution 2015-05, Philipps University Marburg, Department of Geography.
    6. Neffke, Frank & Otto, Anne & Weyh, Antje, 2017. "Skill-relatedness matrices for Germany : Data method and access," FDZ Methodenreport 201704_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Schäffler, Johannes, 2014. "ReLOC linkage: a new method for linking firm-level data with the establishment-level data of the IAB," FDZ Methodenreport 201405_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Geurts, Karen & Van Biesebroeck, Johannes, 2016. "Firm creation and post-entry dynamics of de novo entrants," International Journal of Industrial Organization, Elsevier, vol. 49(C), pages 59-104.
    9. Andrew Kerr, 2016. "Job flows, worker flows, and churning in South Africa," WIDER Working Paper Series 037, World Institute for Development Economic Research (UNU-WIDER).
    10. Karen GEURTS & Johannes VAN BIESEBROECK, 2014. "Job creation, firm creation, and de novo entry," Working Papers Department of Economics ces14.25, KU Leuven, Faculty of Economics and Business, Department of Economics.
    11. Deborah Goldschmidt & Wolfram Klosterhuber & Johannes F Schmieder, 2017. "Identifying couples in administrative data
      [Identifizierung von Ehepaaren in Administrativen Daten]
      ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 29-43, August.
    12. Otto, Anne & Weyh, Antje, 2014. "Industry space and skill-relatedness of economic activities : comparative case studies of three eastern German automotive regions," IAB-Forschungsbericht 201408, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    13. Eliason, Marcus & Hensvik, Lena & Kramarz, Francis & Nordstrom Skans, Oskar, 2017. "The Causal Impact of Social Connections on Firms' Outcomes," CEPR Discussion Papers 12135, C.E.P.R. Discussion Papers.
    14. repec:bla:ecinqu:v:55:y:2017:i:2:p:757-777 is not listed on IDEAS
    15. Bossler, Mario & Oberfichtner, Michael, 2014. "The employment effect of deregulating shopping hours: Evidence from German retailing," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100506, Verein für Socialpolitik / German Economic Association.
    16. Karen Geurts, 2016. "Longitudinal firm-level data: problems and solutions," Small Business Economics, Springer, vol. 46(3), pages 425-445, March.
    17. Fackler, Daniel & Müller, Steffen & Stegmaier, Jens, 2017. "Explaining wage losses after job displacement: Employer size and lost firm rents," IWH Discussion Papers 32/2017, Halle Institute for Economic Research (IWH).
    18. Baumgarten, Daniel & Irlacher, Michael & Koch, Michael, 2018. "Offshoring and non-monotonic employment effects across industries in general equilibrium," Discussion Papers in Economics 43049, University of Munich, Department of Economics.
    19. Dorner, Matthias & Bender, Stefan & Harhoff, Dietmar & Hoisl, Karin & Scioch, Patrycja, 2014. "The MPI-IC-IAB-Inventor data 2002 (MIID 2002): Record-linkage of patent register data with labor market biography data of the IAB," FDZ Methodenreport 201406_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    20. Fackler, Daniel & Hank, Eva & Müller, Steffen & Stegmaier, Jens, 2017. "Identifying bankruptcies in German social security data," FDZ Methodenreport 201710_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    21. repec:spr:qualqt:v:52:y:2018:i:2:d:10.1007_s11135-017-0495-6 is not listed on IDEAS

    More about this item

    Keywords

    firm dynamics; plant closings; establishment entry and exit;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp7672. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak). General contact details of provider: http://www.iza.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.