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The Demand for Labor and Job Turnover: Israeli Manufacturing 1970-1994

Author

Listed:
  • Reuben Gronau

    (Hebrew University and Falk Institute for Economic Research)

  • Haim Regev

    (Central Bureau of Statistics, Israel and Falk Institute for Economic Research)

Abstract

Job turnover is a major sources of labor turnover, and perhaps a contributing factor to unemployment. Job turnover in Israeli manufacturing, in spite of the rigidity of the labor market, does not differ from job turnovers in Europe and North America. New jobs in expanding and new firms increase employment by 10 percent, and contracting and closing firms destroy about 8 percent of all jobs annually. Job turnover can be explained in the framework of a dynamic model of labor demand. The major driving force behind the change in employment are changes in productivity. The negative correlation between the demand for labor and changes in wages is less pronounced. Adjustment costs result in inbuilt inertia in job turnover. The inertia effect is, however, asymmetric. Declines in employment have a much stronger effect than employment increases.

Suggested Citation

  • Reuben Gronau & Haim Regev, 1997. "The Demand for Labor and Job Turnover: Israeli Manufacturing 1970-1994," Working Papers 757, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:378
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    File URL: https://dataspace.princeton.edu/bitstream/88435/dsp01rj4304545/1/378.pdf
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    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2711-2805 is not listed on IDEAS

    More about this item

    Keywords

    labor; job turnover; Israeli manufacturing; Israel;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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