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JOB-TO-JOB (J2J) Flows: New Labor Market Statistics From Linked Employer-Employee Data
September 2014
Working Paper Number:
CES-14-34
Flows of workers across jobs are a principal mechanism by which labor markets allocate workers to optimize productivity. While these job flows are both large and economically important, they represent a significant gap in available economic statistics. A soon to be released data product from the U.S. Census Bureau will fill this gap. The Job-to-Job (J2J) flow statistics provide estimates of worker flows across jobs, across different geographic labor markets, by worker and firm characteristics, including direct job-to-job flows as well as job changes with intervening nonemployment. In this paper, we describe the creation of the public-use data product on job-to-job flows. The data underlying the statistics are the matched employer-employee data from the U.S. Census Bureau's Longitudinal Employer-Household Dynamics program. We describe definitional issues and the identification strategy for tracing worker movements between employers in administrative data. We then compare our data with related series and discuss similarities and differences. Lastly, we describe disclosure avoidance techniques for the public use file, and our methodology for estimating national statistics when there is partially missing geography.
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Don't Quit Your Day Job: Using Wage and Salary Earnings to Support a New Business
September 2013
Working Paper Number:
CES-13-45
This paper makes use of a newly constructed Census Bureau dataset that follows the universe of sole proprietors, employers and non-employers, over 10 years and links their transitions to their activity as employees earning wage and salary income. By combining administrative data on sole proprietors and their businesses with quarterly administrative data on wage and salary jobs held by the same individuals both preceding and concurrent with business startup, we create the unique opportunity to quantify significant workforce dynamics that have up to now remained unobserved. The data allow us to take a first glimpse at these business owners as they initiate business ventures and make the transition from wage and salary work to business ownership and back. We find that the barrier between wage and salary work and self-employment is extremely fluid, with large flows occurring in both directions. We also observe that a large fraction of business owners takeon both roles simultaneously and find that this labor market diversification does have implications for the success of the businesses these owners create. The results for employer transitions to exit and non-employer suggest that there is a 'don't quit your day job' effect that is present for new businesses. Employers are more likely to stay employers if they have a wage and salary job in the year just prior to the transitions that we are tracking. It is especially important to have a stable wage and salary job but there is also evidence that higher earnings from the wage and salary job makes transition less likely. For nonemployers we find roughly similar patterns but there are some key differences. We find that having recent wage and salary income (and having higher earnings from such wage and salary activity) increases the likelihood of survival. Having recent stable wage and salary income decreases the likelihood of a complete exit but increases the likelihood of transiting to be an employer. Having recent wage and salary income in the same industry as the non-employer business has a large and positive impact on the likelihood of transiting to being a non-employer business.
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The Recent Decline in Employment Dynamics
March 2013
Working Paper Number:
CES-13-03
In recent years, the rate at which workers and businesses exchange jobs has declined in the United States. Between 1998 and 2010, rates of job creation, job destruction, hiring, and separation declined dramatically, and the rate of job-to-job flows fell by about half. Little is known about the nature and extent of these changes, and even less about their causes and implications. In this paper, we document and attempt to explain the recent decline in employment dynamics. Our empirical work relies on the four leading datasets of quarterly employment dynamics in the United States ' the Longitudinal Employer-Household Dynamics (LEHD), the Business Employment Dynamics (BED), the Job Openings and Labor Turnover Survey (JOLTS), and the Current Population Survey (CPS). We find that changes in the composition of the labor force and of employers explain relatively little of the decline. Exploiting some identities that relate the different measures to each other, we find that job creation and destruction could explain as much of a third of the decline in hires and separations, while job-to-job flows may explain more of the decline. We end our paper with a discussion of different possible explanations and their relative merits.
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Estimation of Job-to-Job Flow Rates under Partially Missing Geography
September 2012
Working Paper Number:
CES-12-29
Integration of data from different regions presents challenges for the calculation of entitylevel longitudinal statistics with a strong geographic component: for example, movements between employers, migration, business dynamics, and health statistics. In this paper, we consider the estimation of worker-level employment statistics when the geographies (in our application, US states) over which such measures are defined are partially missing. We focus on the recent pilot set of job-to-job flow statistics produced by the US Census Bureau's Longitudinal Employer- Household Dynamics (LEHD) program, which measure the frequency of worker movements between jobs and into and out of nonemployment. LEHD's coverage of the labor force gradually increases during the 1990s and 2000s because some states have a longer time series than others, so employment transitions involving missing states are only partially or not at all observed. We propose and implement a method for estimating national-level job-to-job flow statistics that involves dropping observed states to recover the relationship between missing states and directly tabulated job-to-job flow rates. Using the estimated relationship between the observable characteristics of the missing states and changes in the employment measures, we provide estimates of the rates of job-to-job, and job-to-nonemployment, job-to-nonemploymentto- job flows were all states uniformly available.
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Employer-to-Employer Flows in the United States: Estimates Using Linked Employer-Employee Data
September 2010
Working Paper Number:
CES-10-26
We use administrative data linking workers and firms to study employer-to-employer flows. After discussing how to identify such flows in quarterly data, we investigate their basic empirical patterns. We find that the pace of employer-to-employer flows is high, representing about 4 percent of employment and 30 percent of separations each quarter. The pace of employer-to-employer flows is highly procyclical, and varies systematically across worker, job and employer characteristics. Our findings regarding job tenure and earnings dynamics suggest that for those workers moving directly to new jobs, the new jobs are generally better jobs; however, this pattern is highly procyclical. There are rich patterns in terms of origin and destination of industries. We find somewhat surprisingly that more than half of the workers making employer-to-employer transitions switch even broadly-defined industries (NAICS supersectors).
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National Estimates of Gross Employment and Job Flows from the Quarterly Workforce Indicators with Demographic and Industry Detail
June 2010
Working Paper Number:
CES-10-11
The Quarterly Workforce Indicators (QWI) are local labor market data produced and released every quarter by the United States Census Bureau. Unlike any other local labor market series produced in the U.S. or the rest of the world, the QWI measure employment flows for workers (accession and separations), jobs (creations and destructions) and earnings for demographic subgroups (age and gender), economic industry (NAICS industry groups), detailed geography (block (experimental), county, Core- Based Statistical Area, and Workforce Investment Area), and ownership (private, all) with fully interacted publication tables. The current QWI data cover 47 states, about 98% of the private workforce in those states, and about 92% of all private employment in the entire economy. State participation is sufficiently extensive to permit us to present the first national estimates constructed from these data. We focus on worker, job, and excess (churning) reallocation rates, rather than on levels of the basic variables. This permits comparison to existing series from the Job Openings and Labor Turnover Survey and the Business Employment Dynamics Series from the Bureau of Labor Statistics. The national estimates from the QWI are an important enhancement to existing series because they include demographic and industry detail for both worker and job flow data compiled from underlying micro-data that have been integrated at the job and establishment levels by the Longitudinal Employer-Household Dynamics Program at the Census Bureau. The estimates presented herein were compiled exclusively from public-use data series and are available for download.
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Business Volatility, Job Destruction, and Unemployment
August 2008
Working Paper Number:
CES-08-26
Unemployment inflows fell from 4 percent of employment per month in the early 1980s to 2 percent or less by the mid 1990s and thereafter. U.S. data also show a secular decline in the job destruction rate and the volatility of firm-level employment growth rates. We interpret this decline as a decrease in the intensity of idiosyncratic labor demand shocks, a key parameter in search and matching models of unemployment. According to these models, a lower intensity of idiosyncratic shocks produces less job destruction, fewer workers flowing through the unemployment pool and less frictional unemployment. To evaluate the importance of this theoretical mechanism, we relate industry-level unemployment flows from 1977 to 2005 to industry-level indicators for the intensity of idiosyncratic shocks. Unlike previous research, we focus on the lower frequency relationship of job destruction and business volatility to unemployment flows. We find strong evidence that declines in the intensity of idiosyncratic labor demand shocks drove big declines in the incidence and rate of unemployment. This evidence implies that the unemployment rate has become much less sensitive to cyclical movements in the job-finding rate.
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Employment that is not covered by state unemployment insurance Laws
April 2007
Working Paper Number:
tp-2007-04
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The Dynamics of Worker Reallocation Within and Across Industries
June 2005
Working Paper Number:
tp-2005-02
This paper uses an integrated employer-employee data set to answer two key questions:
1. What is the "equilibrium" amount of worker reallocation in the economy - both within and across industries?
2. How much does firm-level job reallocation affect the separation probabilities of workers?
Consistent with other work, we find that there is a great deal of reallocation in the economy,
although this varies substantially across demographic group. Much worker reallocation is
within the economy, roughly evenly split between within and across broadly defined
industries. An important new finding is that much of this reallocation is confined to a
relatively small subset of workers that is shuffled across jobs - both within and across
industries - in the economy. However, we also find that even for the most stable group of
workers, firm level job reallocation substantially increases the probability of transition for
even the most stable group of workers. Finally, workers who are employed in industries that
provide low returns to tenure are much more likely to reallocate both within and across
industries.
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Worker Advancement in the Low-Wage Labor Market: The Importance of Good Jobs
July 2003
Working Paper Number:
tp-2003-08
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