Worker churn in the cross section and over time: New evidence from Germany

Ruediger Bachmann, Christian Bayer, Christian Merkl, Stefan Seth, Heiko Stüber and Felix Wellschmied

Journal of Monetary Economics, 2021, vol. 117, issue C, 781-797

Abstract: Worker churn is procyclical in the German labor market. We study the plant-level connection of churn and employment growth using the new Administrative Wage and Labor Market Flow Panel from 1975 to 2014. Churn is V-shaped in employment growth. Through analyzing this pattern by worker skill, age, and tenure, we establish that churn is unlikely to result from plant reorganization but rather from uncertainty about match quality. In a dynamic labor demand framework with a time-to-hire friction, churn can be interpreted as a manifestation of idiosyncratically stochastic separation shocks. These shocks become larger and more predictable during booms, leading to procyclical churn.

Keywords: Worker churn; Employment growth; Job flows; Worker flows; Labor demand; Separation shocks; Job-to-job transitions; Aggregate fluctuations (search for similar items in EconPapers)
JEL-codes: E20 E24 E32 J23 J63 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Worker Churn in the Cross Section and Over Time: New Evidence from Germany (2017)
Working Paper: Worker Churn in the Cross Section and Over Time: New Evidence from Germany (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:117:y:2021:i:c:p:781-797

DOI: 10.1016/j.jmoneco.2020.05.003

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