72 research outputs found
How do businesses recruit?
No full textMost economic theories of hiring and job seeking assume that businesses post vacancies when they demand more labor. Workers then apply for the job, and the most qualified candidate is hired. However, as those who have ever recruited or applied for a job know, the recruiting process is considerably more complex. In this article, Jason Faberman discusses some recent research on how employers recruit. It shows that the extent to which a business uses various recruiting channels depends on the characteristics of the employer, how fast the employer is growing (or contracting), and the overall state of the economy.Employment
Hiring, job loss, and the severity of recessions
No full textThe hiring and firing decisions of individual businesses are one of the drivers behind movements in the unemployment rate during expansions and recessions. Whether a recession is driven by large job losses or weak hiring will greatly affect the composition and consequences of the unemployed and can have important policy implications. The extent to which recessions are times of weak hiring or high job loss depends in large part on the severity of the downturn. A recession is a time when the fraction of businesses that are expanding goes down and the fraction of businesses that are contracting goes up. A severe recession is one in which the shift in this distribution is more dramatic. In "Hiring, Job Loss, and the Severity of Recessions," Jason Faberman discusses how the severity of a recession determines whether high job loss or weak hiring will be the more important source of declining employment and rising unemployment through disproportionate changes in the distribution of business-level employment growth.Recessions ; Unemployment
Studying the Labor Market with the Job Openings and Labor Turnover Survey
No full textThe Job Openings and Labor Turnover Survey (JOLTS) is a new data source of the Bureau of Labor Statistics that estimates monthly vacancies, hires, and separations. It has quickly become a useful tool for studying the labor market. This chapter summarizes its aggregate and micro-level evidence, including the relations of vacancies and worker flows to unemployment and other measures of labor market conditions. The chapter also discusses the implications of this evidence and the potential of the data for future research.Vacancies; Beveridge Curve; Labor Turnover; Labor Market Search;
Gross Job Flows over the Past Two Business Cycles: Not all 'Recoveries' are Created Equal
No full textI compare the behavior of job creation and job destruction over the past two economic downturns. Both periods have brief but sharp rises in job destruction followed by flat net job growth. The dynamics underlying these slow recoveries differ drastically. In 1991-92, job destruction is slow to decline. In 2001, job creation falls dramatically and remains persistently low through 2003. I find this trend qualitatively similar in both manufacturing and service industries. I also find that neither a structural shift of jobs across industries nor increased trade liberalization is a consistent explanation for the recent lack of growth. Instead, the evidence suggests that a large drop in business investment may explain the decline in job creation.job reallocation, business cycles, employment fluctuations
Job Flows and Establishment Characteristics: Variations Across U.S. Metropolitan Areas
No full textThis paper addresses the role played within metropolitan areas by heterogeneous agent models of constant churning. The evidence shows positive relationships between job turnover, young establishments, and metropolitan employment growth. Most areas, however, differ in their levels of job creation rather than job destruction. Results persist after controlling for regional differences in industry, but less so when controlling for differences in the establishment age distribution, and are consistent overall with standard models of creative destruction. Evidence from several entering cohorts, however, contradicts the vintage replacement process of creative destruction models. Namely, job destruction decreases as establishments age and there is no clear inverse relation between establishment entry rates and exit ages. These patterns are instead consistent with a turnover process seen in standard models of firm learning. Further evidence suggests that these patterns vary systematically with the overall employment growth of a region. Together, the results suggest that (i) processes of both creative destruction and firm learning may matter for local labor dynamics, but future models will have to reconcile with this new evidence, and (ii) intrinsic local factors, such as the “business climate”, may affect the dynamics of both processes.job turnover, regional and urban growth, creative destruction, firm learning
The Establishment-Level Behavior of Vacancies and Hiring
No full textThis paper is the first to study vacancies, hires, and vacancy yields at the establishment level in the Job Openings and Labor Turnover Survey, a large sample of U.S. employers. To interpret the data, we develop a simple model that identifies the flow of new vacancies and the job-filling rate for vacant positions. The fill rate moves counter to aggregate employment but rises steeply with employer growth rates in the cross section. It falls with employer size, rises with worker turnover rates, and varies by a factor of four across major industry groups. We also develop evidence that the employer-level hiring technology exhibits mild increasing returns in vacancies, and that employers rely heavily on other instruments, in addition to vacancies, as they vary hires. Building from our evidence and a generalized matching function, we construct a new index of recruiting intensity (per vacancy). Recruiting intensity partly explains the recent breakdown in the standard matching function, delivers a better-fitting empirical Beveridge Curve, and accounts for a large share of fluctuations in aggregate hires. Our evidence and analysis provide useful inputs for assessing, developing and calibrating theoretical models of search, matching and hiring in the labor market.
The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links
No full textNew data sources and products developed by the Bureau of Labor Statistics and the Bureau of the Census highlight the fluid character of U.S. labor markets. Private-sector job creation and destruction rates average nearly 8% of employment per quarter. Worker flows in the form of hires and separations are more than twice as large. The data also underscore the lumpy nature of micro-level employment adjustments. More than two-thirds of job destruction occurs at establishments that shrink by more than 10% within the quarter, and more than one-fifth occurs at those that shut down. Our study also uncovers highly nonlinear relationships of worker flows to employment growth and job flows at the micro level. These micro relations interact with movements over time in the cross-sectional density of establishment growth rates to produce recurring cyclical patterns in aggregate labor market flows. Cyclical movements in the layoffs-separation ratio, for example, and the propensity of separated workers to become unemployed reflect distinct micro relations for quits and layoffs. A dominant role for the job-finding rate in accounting for unemployment movements in mild downturns and a bigger role for the job-loss rate in severe downturns reflect distinct micro relations for hires and layoffs.
Adjusted Estimates of Worker Flows and Job Openings in JOLTS
No full textWe develop and implement a method to improve estimates of worker flows and job openings based on the Job Openings and Labor Turnover Survey (JOLTS). Our method involves reweighting the cross-sectional density of employment growth rates in JOLTS to match the corresponding density in the comprehensive Business Employment Dynamics (BED) data. To motivate our work, we compare JOLTS to other data sources and document large discrepancies with respect to aggregate employment growth, the magnitude of worker flows, and the cross-sectional density of establishment growth rates. We also discuss issues related to JOLTS sample design and nonresponse corrections. Our adjusted statistics for hires and separations exceed the published statistics by about one-third. The adjusted layoff rate is more than 60 percent greater than the published layoff rate. Time-series properties are also affected. For example, hires exhibit more volatility than separations in the published statistics, but the reverse holds in the adjusted statistics. The impact of our adjustment methodology on estimated job openings is more modest, raising the vacancy rate by about 8 percent.
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