How Do Industry, Firm and Worker Characteristics Shape Job and Worker Flows?

Abstract

In all OECD countries, many new firms are created every year. At the same time, many existing firms expand, while others contract or even shut down. In the process, many jobs are created and workers are hired; even as many positions are suppressed and workers separate from their employers. The chapter presents stylised facts on gross job flows (i.e. job creation and destruction by firms) and gross worker flows (i.e. hirings and separations) drawing from internationally harmonised data. A wide range of empirical questions are investigated, as a prerequisite for assessing the role of policies in shaping job and worker flows. How large is the reallocation of jobs and workers? Which are the firms that create and destroy the most jobs? In which industries are hiring and dismissal rates largest? Who changes jobs most often? Are labour resources reallocated from the least to the most efficient firms? To address these questions, the chapter goes beyond aggregate data on job and worker flows by analysing industry-level and micro-data. Moreover, by stressing cross-country differences in labour flow patterns, the chapter underlines the potential role for country-specific policies and institutions.