Cyclical Worker Flows: Cleansing vs. Sullying
John Haltiwanger,
Henry Hyatt,
Erika McEntarfer and
Matthew Staiger
Additional contact information
Matthew Staiger: Harvard University
Review of Economic Dynamics, 2025, vol. 55
Abstract:
Do recessions speed up or impede productivity-enhancing reallocation? To investigate this question, we use U.S. linked employer-employee data to examine how worker flows contribute to productivity growth over the business cycle. We find that in expansions high-productivity firms grow faster primarily by hiring workers away from low-productivity firms. Productivity growth slows during recessions when this job ladder collapses. In contrast, layoffs at low-productivity firms disproportionately increase in recessions, which leads to an increase in productivity growth. We thus find evidence of both sullying and cleansing effects of recessions, but the timing of these effects differs. The cleansing effects are concentrated in downturns while the sullying effects linger well into the economic recovery. Our results imply that slow labor market recoveries will be more damaging to productivity growth than V-shaped recoveries due to lingering sullying effects. (Copyright: Elsevier)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://dx.doi.org/10.1016/j.red.2024.101252
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See https://www.sciencedirect.com/ for details.
Related works:
Software Item: Code and data files for "Cyclical Worker Flows: Cleansing vs. Sullying" (2024) 
Working Paper: Online Appendix to "Cyclical Worker Flows: Cleansing vs. Sullying" (2024) 
Working Paper: Cyclical Worker Flows: Cleansing vs. Sullying (2021) 
Working Paper: Cyclical Worker Flows: Cleansing vs. Sullying (2021) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:red:issued:22-202
Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/
DOI: 10.1016/j.red.2024.101252
Access Statistics for this article
Review of Economic Dynamics is currently edited by Loukas Karabarbounis
More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().