Job Turnover and Labor Turnover: A Taxonomy of Employment Dynamics

Abstract

We provide a unified discussion of the relations among flows of workers, changes in employment and changes in the number of jobs at the level of the firm. Using a nationally representative sample of Dutch firms in 1988 and 1990: 1) Nearly half of all hiring is by firms where employment is not growing; 2) Over half of all firing is by firms that are not contracting; 3) Most firing is by firms that are also hiring; 4) Flows of workers within firms are small compared to flows into and out of firms; and 5) Accounting for simultaneous creation and destruction of jobs within firms adds roughly 15 percent to estimates of economy-wide job creation and destruction. The results imply that macroeconomic fluctuations can have substantial effects beyond those indicated by net employment changes at the firm level.

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