The Cyclical Behavior of Short-Term and Long-Term Job Flows

44 Pages Posted: 27 Feb 2002

See all articles by Andrew Figura

Andrew Figura

Board of Governors of the Federal Reserve System - Macroeconomic Analysis Section

Date Written: January 4, 2002

Abstract

Using a band pass filter, this paper estimates plant-level job flows at different frequencies and examines the characteristics of the high frequency (transitory) and low frequency (permanent) component flows. Because high frequency employment movements, which likely result in changes in the utilization of plant assets, and low frequency movements, which likely coincide with the restructuring of plant assets, result in different costs to the economy, understanding their separate behavior is important. High frequency plant-level employment fluctuations account for the majority of cyclical movements in aggregate manufacturing employment, but the temporal separation between job destruction and job creation is more pronounced for low frequency job flows, suggesting that permanent job flows reflect a more protracted employment adjustment process. To facilitate the evaluation of job flow models, many of which describe either transitory or permanent job flows, time series of job flows at different frequencies are presented in the appendix.

Keywords: Job flows, employment fluctuations, frequency decomposition

JEL Classification: E24, J23, J63

Suggested Citation

Figura, Andrew, The Cyclical Behavior of Short-Term and Long-Term Job Flows (January 4, 2002). Available at SSRN: https://ssrn.com/abstract=301528 or http://dx.doi.org/10.2139/ssrn.301528

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