IDEAS home Printed from https://ideas.repec.org/p/zbw/sfb649/sfb649dp2005-045.html
   My bibliography  Save this paper

Labour market dynamics in Germany: Hirings, separations, and job-to-job transitions over the business cycle

Author

Listed:
  • Bachmann, Ronald

Abstract

In this paper, we provide a comprehensive overview of labour market dynamics in Western Ger- many by looking at gross worker flows. To do so, we use a subsample of the registry data collected by the German social security system, the IAB employment sample, for the time period 1975-2001. The latter provides daily information on 2% of the German workforce covered by social security legislation. Using these data, we are able to exactly calculate the number of transitions between the different labour market states, and between different employers over time. We first provide an overview of the cross-section and time series properties of these flows. We then study the cyclical features of gross worker flows, accessions, and separations. We find that separations are relatively flat over the cycle, while accessions are markedly procyclical, and that the increased flow into unemployment in a recession is mainly due to reduced hirings, and hence lower job-to-job transitions, rather than increased match separations. Our findings have important implications both for the way we view recessions and for the role of the labour market as a propagation mechanism for productivity shocks.

Suggested Citation

  • Bachmann, Ronald, 2005. "Labour market dynamics in Germany: Hirings, separations, and job-to-job transitions over the business cycle," SFB 649 Discussion Papers 2005-045, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    • Handle: RePEc:zbw:sfb649:sfb649dp2005-045
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/25064/1/51227195X.PDF
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jovanovic, Boyan, 1984. "Matching, Turnover, and Unemployment," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 108-122, February.
    2. Burda, Michael & Wyplosz, Charles, 1994. "Gross worker and job flows in Europe," European Economic Review, Elsevier, vol. 38(6), pages 1287-1315, June.
    3. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    4. Machin, Stephen & Manning, Alan, 1999. "The causes and consequences of longterm unemployment in Europe," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 47, pages 3085-3139, Elsevier.
    5. Christopher A. Pissarides, 1994. "Search Unemployment with On-the-job Search," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 457-475.
    6. Schmidt, Christoph M., 1999. "Persistence and the German Unemployment Problem: Empirical Evidences on German Labor Market Flows," IZA Discussion Papers 31, Institute of Labor Economics (IZA).
    7. 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, April.
    8. Krause, M.U. & Lubik, T.A., 2004. "On-the-job Search and the Cyclical Dynamics of the Labor Market," Other publications TiSEM 08a72137-ff72-4e18-add3-1, Tilburg University, School of Economics and Management.
    9. Robert E. Hall, 2005. "Employment Efficiency and Sticky Wages: Evidence from Flows in the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 397-407, August.
    10. 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.
    11. Davis, Steven J. & Faberman, Jason & Haltiwanger, John C., 2005. "The Flow Approach to Labor Markets: New Data Sources, Micro-Macro Links and the Recent Downturn," IZA Discussion Papers 1639, Institute of Labor Economics (IZA).
    12. Bernd Fitzenberger & Alfred Garloff, 2008. "Unemployment, Labor Market Transitions, And Residual Wage Dispersion," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(5), pages 561-590, November.
    13. Robert Shimer, 2005. "The cyclicality of hires, separations, and job-to-job transitions," Review, Federal Reserve Bank of St. Louis, vol. 87(Jul), pages 493-508.
    14. Bruce 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.).
    15. Gadi Barlevy, 2002. "The Sullying Effect of Recessions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 65-96.
    16. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, April.
    17. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute of Labor Economics (IZA).
    18. Schmidt, Christoph M., 1999. "The Heterogeneity and Cyclical Sensitivity of Unemployment: An Exploration of German Labor Market Flows," IZA Discussion Papers 84, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:hum:wpaper:sfb649dp2005-045 is not listed on IDEAS
    2. Yashiv, Eran, 2007. "Labor search and matching in macroeconomics," European Economic Review, Elsevier, vol. 51(8), pages 1859-1895, November.
    3. Murat Tasci, 2006. "On-the-Job Search and Labor Market Reallocation," 2006 Meeting Papers 333, Society for Economic Dynamics.
    4. Robert Shimer, 2005. "The cyclicality of hires, separations, and job-to-job transitions," Review, Federal Reserve Bank of St. Louis, vol. 87(Jul), pages 493-508.
    5. Ronald Bachmann & Peggy Bechara, 2019. "The Importance of Two‐Sided Heterogeneity for the Cyclicality of Labour Market Dynamics," Manchester School, University of Manchester, vol. 87(6), pages 794-820, December.
    6. Beauchemin, Kenneth & Tasci, Murat, 2014. "Diagnosing Labor Market Search Models: A Multiple-Shock Approach," Macroeconomic Dynamics, Cambridge University Press, vol. 18(3), pages 548-572, April.
    7. Gomes, Pedro, 2012. "Labour market flows: Facts from the United Kingdom," Labour Economics, Elsevier, vol. 19(2), pages 165-175.
    8. 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.
    9. Christopher A. Pissarides, 2009. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," Econometrica, Econometric Society, vol. 77(5), pages 1339-1369, September.
    10. 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.
    11. Shigeru Fujita, 2011. "Dynamics of worker flows and vacancies: evidence from the sign restriction approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(1), pages 89-121, January/F.
    12. Ravi Balakrishnan, 2001. "The interaction of firing costs and on-the-job search: an application of a search theoretic model to the Spanish labour market," Working Papers 0102, Banco de España.
    13. Hairault, Jean-Olivier & Zhutova, Anastasia, 2018. "The cyclicality of labor-market flows: A multiple-shock approach," European Economic Review, Elsevier, vol. 103(C), pages 150-172.
    14. Barnichon, Regis, 2012. "Vacancy posting, job separation and unemployment fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 36(3), pages 315-330.
    15. Domenico Ferraro, 2018. "The Asymmetric Cyclical Behavior of the U.S. Labor Market," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 145-162, October.
    16. Krause, M.U. & Lubik, T.A., 2004. "On-the-job Search and the Cyclical Dynamics of the Labor Market," Other publications TiSEM 08a72137-ff72-4e18-add3-1, Tilburg University, School of Economics and Management.
    17. Miyamoto, Hiroaki & Takahashi, Yuya, 2011. "Productivity growth, on-the-job search, and unemployment," Journal of Monetary Economics, Elsevier, vol. 58(6), pages 666-680.
    18. Schaffner, Sandra, 2011. "Heterogeneity in the cyclical sensitivity of job-to-job flows," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 43(4), pages 263-275.
    19. Kuo Chun-Hung & Miyamoto Hiroaki, 2019. "Fiscal stimulus and unemployment dynamics," The B.E. Journal of Macroeconomics, De Gruyter, vol. 19(2), pages 1-19, June.
    20. Rogerson, Richard & Shimer, Robert, 2011. "Search in Macroeconomic Models of the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 7, pages Pages: 61, Elsevier.
    21. Burgess, Simon & Turon, Hélène, 2010. "Worker flows, job flows and unemployment in a matching model," European Economic Review, Elsevier, vol. 54(3), pages 393-408, April.

    More about this item

    Keywords

    worker flows; accessions; separations; business cycle; job-to-job; employer-to-employer;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

    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:zbw:sfb649:sfb649dp2005-045. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/sohubde.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.