Cyclical Reallocation of Workers Across Employers by Firm Size and Firm Wage / John Haltiwanger, Henry Hyatt, Erika McEntarfer.

Format:

Book

Author/Creator:

Haltiwanger, John.

Contributor:

National Bureau of Economic Research.

Hyatt, Henry.

McEntarfer, Erika.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21235.

NBER working paper series no. w21235

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

Do the job-to-job moves of workers contribute to the cyclicality of employment growth at different types of firms? In this paper, we use linked employer-employee data to provide direct evidence on the role of job-to-job flows in job reallocation in the U.S. economy. To guide our analysis, we look to the theoretical literature on on-the-job search, which predicts that job-to-job flows should reallocate workers from small to large firms. While this prediction is not supported by the data, we do find that job-to-job moves generally reallocate workers from lower paying to higher paying firms, and this reallocation of workers is highly procyclical. During the Great Recession, this firm wage job ladder collapsed, with net worker reallocation to higher wage firms falling to zero. We also find that differential responses of net hires from non-employment play an important role in the patterns of the cyclicality of employment dynamics across firms classified by size and wage. For example, we find that small and low wage firms experience greater reductions in net hires from non-employment during periods of economic contractions.

Notes:

Print version record

June 2015.