Is Reallocation Related to the Cycle? A Look at Permanent and Temporary Job Flows

48 Pages Posted: 19 Apr 2002

See all articles by Andrew Figura

Andrew Figura

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

Date Written: March 2002

Abstract

How much of aggregate employment fluctuations is due to plants destroying and then recreating the same jobs over the cycle and how much is due to some plants permanently destroying jobs in a recession and other plants permanently creating jobs in an expansion? This paper decomposes plant level job flows into permanent and temporary components to answer this quesion, and finds that the permanent reallocation of jobs across plants accounts for approximately 30 percent of the cyclical fluctuations in aggregate employment.

Keywords: Job flows, reallocation, employment fluctuations

JEL Classification: E24, J23, J63

Suggested Citation

Figura, Andrew, Is Reallocation Related to the Cycle? A Look at Permanent and Temporary Job Flows (March 2002). Available at SSRN: https://ssrn.com/abstract=306125 or http://dx.doi.org/10.2139/ssrn.306125

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