Who Creates and Destroys Jobs Over the Business Cycle?

56 Pages Posted: 15 Mar 2019

See all articles by Andrea Colciago

Andrea Colciago

De Nederlandsche Bank - Research Department; Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS); Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

Volker Lindenthal

Ludwig Maximilian University of Munich (LMU)

Antonella Trigari

Bocconi University - Department of Economics

Date Written: March 14, 2019

Abstract

Using US annual data spanning four decades and several business cycles, we show that that job flow rates of young firms are more cyclical than those of mature firms and detect no difference between the cyclicality of job flow rates of small and large firms. Further, we find that job flow rates due to contractions and expansions of continuing establishments are more cyclical than those due to entry and exit. At the same time the job flow rates of mature firms provide a larger contribution to the overall variability of aggregate job flow rates with respect to those of young firms. The reason is that mature firms employ the vast majority of US workers, and the fraction of aggregate variability of aggregate job flows explained by the job flow of firms belonging to a specific category is proportional to the category's employment share. On the contrary, there is no relevant difference in the contribution to aggregate fluctuations between the job flow rates of firms of different sizes. Our findings hold independently of whether we focus simply on the Great Recession period or on the full sample.

Keywords: Job Creation, Job Destruction, Business Cycle, Small Firms, Large Firms, Young Firms, Mature Firms

JEL Classification: D22, E23, E32, J23, L25

Suggested Citation

Colciago, Andrea and Lindenthal, Volker and Trigari, Antonella, Who Creates and Destroys Jobs Over the Business Cycle? (March 14, 2019). De Nederlandsche Bank Working Paper No. 628 (2019), Available at SSRN: https://ssrn.com/abstract=3352509 or http://dx.doi.org/10.2139/ssrn.3352509

Andrea Colciago (Contact Author)

De Nederlandsche Bank - Research Department ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

U6 Building
Viale Piero e Alberto Pirelli, 22
Milano, 20126
Italy

Volker Lindenthal

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

HOME PAGE: http://https://sites.google.com/site/volkerlindenthal

Antonella Trigari

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

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