Working Paper: CEPR ID: DP5161
Authors: Anne Gielen; Jan C. van Ours
Abstract: We present an empirical analysis of job reallocation and labour mobility using matched worker-firm data for the Netherlands to investigate how firms adjust their workforce over the cycle. Our data cover the period 1993-2002. We find that cyclical adjustments of the workforce occur mainly through fluctuations in job creation for young and prime-age workers while for old workers they occur mainly through fluctuations in job destruction. Moreover, we find that business cycle fluctuations are used to rejuvenate the workforce. Workforce reductions are most harmful for old workers; for them the flow out of employment is a one-way street.
Keywords: accessions; job creation; job destruction; matched worker-firm data; separations
JEL Codes: J23; J62; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| business cycle fluctuations (E32) | job reallocation for young and prime-age workers (J62) |
| business cycle fluctuations (E32) | job destruction for older workers (J26) |
| job destruction for older workers (J26) | higher job loss during economic downturns (J63) |
| business cycle fluctuations (E32) | rejuvenation of the workforce (J26) |
| job loss for older workers (J26) | less likely to find new employment quickly (J63) |
| business cycle fluctuations (E32) | mobility of young workers (J61) |
| job losses during economic upturns (J63) | recovery of young workers (J68) |