Using Worker Flows in the Analysis of the Firm

U.S. Census Bureau, LEHD Technical Paper No. TP-2003-09

41 Pages Posted: 25 Oct 2004

See all articles by Gary Benedetto

Gary Benedetto

United States Census Bureau

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Julia Lane

Wagner Graduate School of Public Service; Institute for the Study of Labor (IZA)

Kevin L McKinney

University of California, Los Angeles (UCLA)

Date Written: May 2005

Abstract

This paper uses a novel approach to measure firm entry and exit, mergers and acquisition. It uses information about the flows of clusters of workers across business units to identify longitudinal linkage relationships in longitudinal business data. These longitudinal relationships may be the result of either administrative or economic changes and we explore both types of newly identified longitudinal relationships. In particular, we develop a set of criteria based on worker flows to identify changes in firm relationships - such as mergers and acquisitions, administrative identifier changes and outsourcing. We demonstrate how this new data infrastructure and this cluster flow methodology can be used to better differentiate true firm entry/exit and simple changes in administrative identifiers. We explore the role of outsourcing in a variety of ways but in particular the outsourcing of workers to the temporary help industry. While the primary focus is on developing the data infrastructure and the methodology to identify and interpret these clustered flows of workers, we conclude the paper with an analysis of the impact of these changes on the earnings of workers.

Keywords: Successor/Predecessor firms, matched employer/employee data, worker

JEL Classification: L20, L23, J00

Suggested Citation

Benedetto, Gary and Haltiwanger, John C. and Lane, Julia and McKinney, Kevin L, Using Worker Flows in the Analysis of the Firm (May 2005). U.S. Census Bureau, LEHD Technical Paper No. TP-2003-09. Available at SSRN: https://ssrn.com/abstract=608221 or http://dx.doi.org/10.2139/ssrn.608221

Gary Benedetto (Contact Author)

United States Census Bureau ( email )

4600 Silver Hill Road
Washington, DC 20233
United States

John C. Haltiwanger

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3504 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Julia Lane

Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org

Kevin L McKinney

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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