OECD Social, Employment and Migration Working Papers

1815-199X (online)
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This series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language - English or French - with a summary in the other.

Looking Inside the Perpetual-Motion Machine

Job and Worker Flows in OECD Countries You or your institution have access to this content

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Andrea Bassanini, Pascal Marianna
15 Sep 2009
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In the economic literature there is an increasing interest in the process of job creation and destruction as well of hirings and separations. Many studies suggest that idiosyncratic firm-level characteristics shape both job and worker flows in a similar way in all countries. Others argue that cross-country differences in terms of gross job flows are minor. However, these statements are usually based on the comparison of national estimates, typically collected on the basis of different definitions and collection protocols. By contrast, in this paper, we use crosscountry comparable data on both job and worker flows to examine key determinants of these flows and of their cross-country differences. We find that idiosyncratic firm (industry, firm age and size) and worker (age, gender, education) characteristics play an important role for both gross job and worker flows in all countries. Nevertheless, in contrast with part of the literature, we find that, even controlling for these idiosyncratic factors, cross-country differences concerning both gross job and worker flows appear large and of a similar magnitude. Both job and worker flows in countries such as the United States and the United Kingdom exceed those in certain continental European countries by a factor of two. Moreover, the variation of worker flows across different dimensions is well explained by the variation of job flows, suggesting that, to a certain extent, the two flows can be used as substitutes in cross-country analysis. Consistently, churning flows, that is flows originating by firms churning workers and employees quitting and being replaced, display much less variation across countries.
JEL Classification:
  • J23: Labor and Demographic Economics / Demand and Supply of Labor / Labor Demand
  • J24: Labor and Demographic Economics / Demand and Supply of Labor / Human Capital ; Skills ; Occupational Choice ; Labor Productivity
  • J63: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Turnover ; Vacancies ; Layoffs
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