Labor Statistics Term paper

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The relatively recent development of longitudinal establishment datasets has

generated quite a bit of excitement in both the academic and the statistical

communities. From this literature, we have learned that there is a large amount

of volatility at the individual establishment level that underlies the smooth

time series of aggregate employment growth. The descriptive statistics coming

out of this literature have not only stimulated the review and updating of

existing labor market theories, but have also stimulated the U.S. statistical

agencies to develop their administrative datasets in such a way so as to produce

longitudinal job flow statistics. The purpose of this paper is to use a new

longitudinal database from the Bureau of Labor Statistics (BLS) in order to

examine how establishment births and deaths contribute to job creation, job

destruction, and net employment growth at different frequencies of measurement.

Despite all that we have learned about the labor market from the existing job

flows literature, the conclusions that can be drawn from these studies are

somewhat limited. First, almost all of the existing work using U.S. data has

been restricted to the manufacturing sector. Recent work by several authors has

illustrated how job creation and job destruction in manufacturing may not be

representative of the entire U.S. economy. 1 A second limitation is that most of

the existing empirical work on job flows, either by choice or by necessity, is

based upon data that excludes the smallest establishments. 2 Since most

establishment births and deaths are quite small, at least in the short run,...

Anderson, Patricia M. and Bruce D. Meyer. 1994. “The Extent and
Consequences of Job Turnover.” Brookings Papers on Economic Activity, pp.
177-236. Audretsch, David B. and Talat Mahmood. 1994. “The Rate of Hazard
Confronting New Firms and Plants in U.S. Manufacturing.” Review of Industrial
Organization, pp. 41-56. Baldwin, John R. and Paul K. Gorecki. 1989.
“Measuring Firm Entry and Exit With Panel Data.” Proceedings of the
Statistics Canada Symposium on Analysis of Data in Time. Baldwin, John R. and
Paul K. Gorecki. 1991. “Firm Entry and Exit in the Canadian Manufacturing
Sector, 1970-1982.” Canadian Journal of Economics, pp. 300-323. Boeri, Tito.
1996. “Is Job Turnover Countercyclical?” Journal of Labor Economics, pp.
603-625. Boeri, Tito and Lutz Bellmann. 1995. “Post-entry Behaviour and the
Cycle: Evidence from Germany.” International Journal of Industrial
Organization, pp. 483-500. Boeri, Tito and Ulrich Cramer. 1992. “Employment
Growth, Incumbents, and Entrants.” International Journal of Industrial
Organization, pp. 545-565. Brüderl, Josef and Rudolf Schüssler. 1990.
“Organizational Mortality: The Liabilities of Newness and Adolescence.”
Administrative Science Quarterly, pp. 530-547. Brüderl, Josef, Peter Preisendörfer,
and Rolf Ziegler. 1992. “Survival Chances of Newly Founded Business
Organizations.” American Sociological Review, pp. 227-242. Davis, Steven J.
and John C. Haltiwanger. 1990. “Gross Job Creation and Destruction:
Microeconomic Evidence and Macroeconomic Implications.” NBER Macroeconomics
Annual, pp. 123-168. Davis, Steven J. and John C. Haltiwanger. 1992. “Gross
Job Creation, Gross Job Destruction, and Employment Reallocation.” Quarterly
Journal of Economics, pp. 819-863. Davis, Steven J. and John C. Haltiwanger.
1995. “Measuring Gross Worker and Job Flows.” NBER Working Paper #5133.
Davis, Steven J., John C. Haltiwanger, and Scott Schuh. 1993. “Small Business
and Job Creation: Dissecting the Myth and Reassessing the Facts.” NBER Working
Paper #4492. Davis, Steven J., John C. Haltiwanger, and Scott Schuh. 1996. Job
Creation and Destruction. MIT Press. Dunne, Timothy, Mark J. Roberts, and Larry
Samuelson. 1988. “Patterns of Firm Entry and Exit in U.S. Manufacturing
Industries.” Rand Journal of Economics, pp. 495-515. You should cite this paper as follows:

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