Working Paper: NBER ID: w11647
Authors: David Neumark; Junfu Zhang; Brandon Wall
Abstract: We analyze and assess new evidence on employment dynamics from a new data source — the National Establishment Time Series (NETS). The NETS offers advantages over existing data sources for studying employment dynamics, including tracking business establishment relocations that can contribute to job creation or destruction on a regional level. Our primary purpose in this paper is to assess the reliability of the NETS data along a number of dimensions, and we conclude that it is a reliable data source although not without limitations. We also illustrate the usefulness of the NETS data by reporting, for California, a full decomposition of employment change into its six constituent processes, including job creation and destruction stemming from business relocation, which has figured prominently in policy debates but on which there has been no systematic evidence.
Keywords: employment dynamics; business relocation; national establishment time series; job creation; job destruction
JEL Codes: J63; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| California loses establishments due to business relocation (J63) | net loss of establishments (J63) |
| California loses jobs due to business relocation (J63) | net loss of jobs (J63) |
| job loss from relocation (J63) | overall employment changes (J63) |
| establishments are more likely to relocate within California (R30) | relocations within the state (J62) |
| employment growth is driven by expansion, contraction, births, and deaths (J11) | employment dynamics (J63) |
| business relocations contribute minimally to overall employment dynamics (F29) | overall employment dynamics (J60) |