IDEAS home Printed from https://ideas.repec.org/p/fip/fedgif/1074.html
   My bibliography  Save this paper

The cyclicality of job-to-job transitions and its implications for aggregate productivity

Author

Listed:
  • Toshihiko Mukoyama

Abstract

This paper analyzes the job-to-job transitions of workers in the United States. I propose a new method of correcting the time-aggregation bias. The bias-corrected series from 1996 to 2011 reveals a procyclical pattern of job-to-job transition and a large decline since the beginning of the 2000s. I construct a model of on-the-job search and explore the implications of this phenomenon. The calibrated model shows that the decline in the reallocation of workers through job-to-job transitions has had a substantial effct on total factor productivity (TFP). From 2009 to 2011, the model accounts for about 0.5%-0.7% annual decline in TFP.

Suggested Citation

  • Toshihiko Mukoyama, 2013. "The cyclicality of job-to-job transitions and its implications for aggregate productivity," International Finance Discussion Papers 1074, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgif:1074
    as

    Download full text from publisher

    File URL: http://www.federalreserve.gov/pubs/ifdp/2013/1074/default.htm
    Download Restriction: no
    File URL: http://www.federalreserve.gov/pubs/ifdp/2013/1074/ifdp1074.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Melissa Bjelland & Bruce Fallick & John Haltiwanger & Erika McEntarfer, 2011. "Employer-to-Employer Flows in the United States: Estimates Using Linked Employer-Employee Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(4), pages 493-505, October.
    2. Henry Hyatt & James Spletzer, 2013. "The recent decline in employment dynamics," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    3. Olivier Blanchard & Jordi Galí, 2010. "Labor Markets and Monetary Policy: A New Keynesian Model with Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 1-30, April.
    4. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2005. "Unemployment and vacancy fluctuations in the matching model: inspecting the mechanism," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 91(Sum), pages 19-50.
    5. Andreas Mueller & Robert Hall, 2013. "Viewing Job-Seekers' Reservation Wages and Acceptance Decisions through the Lens of Search Theory," 2013 Meeting Papers 486, Society for Economic Dynamics.
    6. Alan B. Krueger & Andreas Mueller, 2011. "Job Search and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," Working Papers 1295, Princeton University, Department of Economics, Center for Economic Policy Studies..
    7. Edward P. Lazear & James R. Spletzer, 2012. "Hiring, Churn, and the Business Cycle," American Economic Review, American Economic Association, vol. 102(3), pages 575-579, May.
    8. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
    9. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, vol. 62(1), pages 1-18, March.
    10. Robert Shimer, 2005. "The cyclicality of hires, separations, and job-to-job transitions," Review, Federal Reserve Bank of St. Louis, vol. 87(Jul), pages 493-508.
    11. Gadi Barlevy, 2002. "The Sullying Effect of Recessions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(1), pages 65-96.
    12. Bruce Fallick & John Haltiwanger & Erika McEntarfer, 2012. "Job-to-job flows and the consequences of job separations," Finance and Economics Discussion Series 2012-73, Board of Governors of the Federal Reserve System (U.S.).
    13. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Econometrica, Econometric Society, vol. 70(6), pages 2295-2350, November.
    14. Gary Solon & Ryan Michaels & Michael W. L. Elsby, 2009. "The Ins and Outs of Cyclical Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 84-110, January.
    15. Giuseppe Moscarini & Kaj Thomsson, 2007. "Occupational and Job Mobility in the US," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(4), pages 807-836, December.
    16. Shigeru Fujita & Giuseppe Moscarini, 2017. "Recall and Unemployment," American Economic Review, American Economic Association, vol. 107(12), pages 3875-3916, December.
    17. Mukoyama, Toshihiko, 2014. "The cyclicality of job-to-job transitions and its implications for aggregate productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 39(C), pages 1-17.
    18. Henry Hyatt & Erika McEntarfer, 2012. "Job-to-Job Flows and the Business Cycle," Working Papers 12-04, Center for Economic Studies, U.S. Census Bureau.
    19. repec:pri:cepsud:215krueger is not listed on IDEAS
    20. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8grh35j2 is not listed on IDEAS
    21. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Post-Print hal-03458567, HAL.
    22. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    23. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
    24. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
    25. Bruce Fallick & Charles A. Fleischman, 2004. "Employer-to-employer flows in the U.S. labor market: the complete picture of gross worker flows," Finance and Economics Discussion Series 2004-34, Board of Governors of the Federal Reserve System (U.S.).
    26. Alan B. Krueger & Andreas Mueller, 2011. "Job Search, Emotional Well-Being and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(1 (Spring), pages 1-81.
    27. repec:pri:indrel:dsp014j03cz656 is not listed on IDEAS
    28. Krueger, Alan B. & Mueller, Andreas I., 2011. "Job Search and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," IZA Discussion Papers 5450, Institute of Labor Economics (IZA).
    29. Oliver Jean Blanchard & Peter Diamond, 1990. "The Cyclical Behovior of the Gross Flows of U.S. Workers," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(2), pages 85-156.
    30. John G. Fernald, 2012. "A quarterly, utilization-adjusted series on total factor productivity," Working Paper Series 2012-19, Federal Reserve Bank of San Francisco.
    31. repec:hal:spmain:info:hdl:2441/dc0ckec3fcb29ms985085gkbp is not listed on IDEAS
    32. Per Krusell & Toshihiko Mukoyama & Richard Rogerson & Ayşegül Şahin, 2012. "Is Labor Supply Important for Business Cycles?," NBER Working Papers 17779, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel Borowczyk-Martins & Etienne Lalé, 2016. "The Rise of Part-time Employment," SciencePo Working papers hal-01311976, HAL.
    2. Jan Eeckhout & Ilse Lindenlaub, 2019. "Unemployment Cycles," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(4), pages 175-234, October.
    3. John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2015. "Cyclical Reallocation of Workers Across Employers by Firm Size and Firm Wage," Working Papers 15-13, Center for Economic Studies, U.S. Census Bureau.
    4. Hahn, Joyce K. & Hyatt, Henry R. & Janicki, Hubert P., 2021. "Job ladders and growth in earnings, hours, and wages," European Economic Review, Elsevier, vol. 133(C).
    5. Etienne Lalé, 2019. "Search and Multiple Jobholding," Upjohn Working Papers 19-305, W.E. Upjohn Institute for Employment Research.
    6. repec:spo:wpecon:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS
    7. repec:spo:wpmain:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS
    8. Mussida Chiara & Zanin Luca, 2019. "Voluntary Mobility of Employees for Better Job Opportunities Given a Temporary Contract: Insights Regarding an Age-Varying Association Between the Two Events," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-27, April.
    9. Joanna Tyrowicz & Lucas Velde & Jan Svejnar, 2017. "Effects Of Labor Reallocation On Productivity And Inequality—Insights From Studies On Transition," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 712-732, July.
    10. Carlo Pizzinelli & Konstantinos Theodoridis & Francesco Zanetti, 2020. "State Dependence In Labor Market Fluctuations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(3), pages 1027-1072, August.
    11. repec:hal:spmain:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS
    12. Matthew Knowles & Mario Lupoli, 2023. "The Nash Wage Elasticity and its Business Cycle Implications," ECONtribute Discussion Papers Series 240, University of Bonn and University of Cologne, Germany.
    13. Ismail Baydur & Toshihiko Mukoyama, 2020. "Job Duration and Match Characteristics over the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 37, pages 33-53, July.
    14. John C. Haltiwanger & Henry R. Hyatt & Lisa B. Kahn & Erika McEntarfer, 2018. "Cyclical Job Ladders by Firm Size and Firm Wage," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 52-85, April.
    15. Mukoyama, Toshihiko, 2014. "The cyclicality of job-to-job transitions and its implications for aggregate productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 39(C), pages 1-17.
    16. Sergio A. De Raco & Viktoriya Semeshenko, 2024. "Portrait comparison of binary and weighted Skill Relatedness Networks," Papers 2404.12193, arXiv.org.
    17. Elias Albagli & Alberto Naudon & Benjamin Garcia & Matias Tapia & Sebastian Guarda, 2019. "Job Ladders and Labor Productivity Dynamics," 2019 Meeting Papers 880, Society for Economic Dynamics.
    18. repec:hal:wpspec:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS
    19. Tomaz Cajner & Isabel Cairo, 2013. "The Fading Dynamism of the US Labor Market: The Role of Demographics," 2013 Meeting Papers 1208, Society for Economic Dynamics.
    20. Simmons, Michael, 2023. "Job-to-job transitions, job finding and the ins of unemployment," Labour Economics, Elsevier, vol. 80(C).
    21. Chiara Mussida & Luca Zanin, 2020. "I found a better job opportunity! Voluntary job mobility of employees and temporary contracts before and after the great recession in France, Italy and Spain," Empirical Economics, Springer, vol. 59(1), pages 47-98, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guo, Junjie, 2022. "The persistent impact of multiple offers," Labour Economics, Elsevier, vol. 74(C).
    2. Alisdair McKay & Tamas Papp, 2011. "Accounting for Idiosyncratic Wage Risk Over the Business Cycle," Boston University - Department of Economics - Working Papers Series WP2011-028, Boston University - Department of Economics.
    3. Borowczyk-Martins, Daniel & Lalé, Etienne, 2020. "The ins and outs of involuntary part-time employment," Labour Economics, Elsevier, vol. 67(C).
    4. Jan Eeckhout & Ilse Lindenlaub, 2019. "Unemployment Cycles," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(4), pages 175-234, October.
    5. Giuseppe Moscarini & Fabien Postel-Vinay, 2016. "Wage Posting and Business Cycles: a Quantitative Exploration," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 19, pages 135-160, January.
    6. Henry Hyatt & James Spletzer, 2013. "The recent decline in employment dynamics," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    7. Fujita, Shigeru, 2018. "Declining labor turnover and turbulence," Journal of Monetary Economics, Elsevier, vol. 99(C), pages 1-19.
    8. Rogerson, Richard & Shimer, Robert, 2011. "Search in Macroeconomic Models of the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 7, pages Pages: 61, Elsevier.
    9. Hall, R.E., 2016. "Macroeconomics of Persistent Slumps," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2131-2181, Elsevier.
    10. Jordi Galí & Thijs van Rens, 2021. "The Vanishing Procyclicality of Labour Productivity [Why have business cycle fluctuations become less volatile?]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 302-326.
    11. Peter Diamond, 2011. "Unemployment, Vacancies, Wages," American Economic Review, American Economic Association, vol. 101(4), pages 1045-1072, June.
    12. Philip Jung & Moritz Kuhn, 2019. "Earnings Losses and Labor Mobility Over the Life Cycle," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 678-724.
    13. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," American Economic Review, American Economic Association, vol. 101(7), pages 2873-2898, December.
    14. R. Jason Faberman & Andreas I. Mueller & Ayşegül Şahin & Giorgio Topa, 2022. "Job Search Behavior Among the Employed and Non‐Employed," Econometrica, Econometric Society, vol. 90(4), pages 1743-1779, July.
    15. Bowlus, Audra J. & Liu, Huju, 2013. "The contributions of search and human capital to earnings growth over the life cycle," European Economic Review, Elsevier, vol. 64(C), pages 305-331.
    16. Tamas Papp, 2013. "Frictional wage dispersion with Bertrand competition: an assessment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(3), pages 540-552, July.
    17. repec:hal:spmain:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS
    18. William D. Craighead, 2019. "Hysteresis In A New Keynesian Model," Economic Inquiry, Western Economic Association International, vol. 57(2), pages 1082-1097, April.
    19. Felipe Alves, 2022. "Job Ladder and Business Cycles," Staff Working Papers 22-14, Bank of Canada.
    20. Ronald Wolthoff, 2014. "It'S About Time: Implications Of The Period Length In An Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(3), pages 839-867, August.
    21. repec:spo:wpmain:info:hdl:2441/7arg7blugi9b2o08qjafcpg8e2 is not listed on IDEAS
    22. Michael W. L. Elsby & Ryan Michaels & David Ratner, 2015. "The Beveridge Curve: A Survey," Journal of Economic Literature, American Economic Association, vol. 53(3), pages 571-630, September.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgif:1074. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.