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The importance of two-sided heterogeneity for the cyclicality of labour market dynamics

Author

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  • Bachmann, Ronald
  • David, Peggy
Abstract
Using two data sets derived from German administrative data, including a linked employer-employee data set, we investigate the cyclicality of worker and job °ows. The analysis stresses the importance of two-sided labour market heterogeneity in this context, taking into account both observed and unobserved characteristics. We find that small firms hire mainly unemployed workers, and that they do so at the beginning of an economic expansion. Later on in the expansion, hirings more frequently result from direct job-to-job transitions, with employed workers moving to larger firms. Contrary to our expectations, workers moving to larger firms do not experience signi¯cantly larger wage gains than workers moving to smaller establishments. Furthermore, our econometric analysis shows that the interaction of unobserved heterogeneities on the two sides of the labour market plays a more important role for employed job seekers than for the unemployed.

Suggested Citation

  • Bachmann, Ronald & David, Peggy, 2009. "The importance of two-sided heterogeneity for the cyclicality of labour market dynamics," Technical Reports 2009,05, Technische Universität Dortmund, Sonderforschungsbereich 475: Komplexitätsreduktion in multivariaten Datenstrukturen.
    • Handle: RePEc:zbw:sfb475:200905
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    Cited by:

    1. Ronald Bachmann & Mathias Sinning, 2011. "Decomposing the Ins and Outs of Cyclical Unemployment," Ruhr Economic Papers 0305, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    2. Ronald Bachmann & Peggy Bechara & Anica Kramer & Sylvi Rzepka, 2015. "Labour market dynamics and worker heterogeneity during the Great Recession – Evidence from Europe," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-29, December.
    3. Ronald Bachmann & Mathias Sinning, 2016. "Decomposing the Ins and Outs of Cyclical Unemployment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 853-876, December.
    4. repec:hal:spmain:info:hdl:2441/59cr4u3mmr9pobrceptvua5g8c is not listed on IDEAS
    5. repec:spo:wpmain:info:hdl:2441/59cr4u3mmr9pobrceptvua5g8c is not listed on IDEAS
    6. Ronald Bachmann & Peggy Bechara & Anica Kramer & Sylvi Rzepka, 2014. "Labour Market Dynamics and Worker Heterogeneity During the Great Recession – Evidence from Europe," Ruhr Economic Papers 0499, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    7. Francesco Pastore & Joanna Tyrowicz, 2013. "Polish high unemployment and spatial labor turnover. Insights from panel data analysis using unemployment registry data," Working Papers 2013-18, Faculty of Economic Sciences, University of Warsaw.
    8. Giuseppe Moscarini & Fabien Postel-Vinay, 2012. "The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment," American Economic Review, American Economic Association, vol. 102(6), pages 2509-2539, October.
    9. Bachmann, Ronald & Baumgarten, Daniel & Stiebale, Joel, 2011. "Cross-border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany," Ruhr Economic Papers 268, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Pastore, Francesco & Tyrowicz, Joanna, 2012. "Labour Turnover and the Spatial Distribution of Unemployment: A Panel Data Analysis Using Employment Registry Data," IZA Discussion Papers 7074, Institute of Labor Economics (IZA).
    11. repec:zbw:rwirep:0268 is not listed on IDEAS
    12. repec:zbw:rwirep:0499 is not listed on IDEAS
    13. Boris Augurzky & Arndt Reichert & Harald Tauchmann, 2010. "The Eff ect of Self-assessed Job Security on the Demand for Medical Rehab," Ruhr Economic Papers 0162, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    14. repec:zbw:rwirep:0162 is not listed on IDEAS
    15. Augurzky, Boris & Reichert, Arndt & Tauchmann, Harald, 2010. "The Effect of Self-assessed Job Security on the Demand for Medical Rehab," Ruhr Economic Papers 162, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Moertel, Julia & Rebien, Martina, 2013. "Personalauswahl: Wie Langzeitarbeitslose bei den Betrieben ankommen (How long-term-unemployed are reaching firms)," IAB-Kurzbericht 201309, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    17. Markus Heckmann & Susanne Noll & Martina Rebien, 2013. "Stellenbesetzungen mit Hindernissen: Bestimmungsfaktoren für den Suchverlauf," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 6(3), pages 105-131, March.
    18. Ronald Bachmann & Daniel Baumgarten & Joel Stiebale, 2011. "Cross-border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany," Ruhr Economic Papers 0268, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    19. repec:zbw:rwirep:0305 is not listed on IDEAS
    20. Bachmann, Ronald & Bechara, Peggy & Kramer, Anica & Rzepka, Sylvi, 2014. "A Study on Labour Market Transitions Using Micro-data from the Statistics on Income and Living Conditions (SILC). Final Report," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 111484.

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    More about this item

    Keywords

    worker °ows; accessions; separations; business cycle; job-to-job; employer-to-employer; linked employer-employee;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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