Vacancy Chains

Ryan Michaels, David Ratner and Michael Elsby
Additional contact information
Ryan Michaels: Federal Reserve Bank of Philadelphia
David Ratner: Federal Reserve Board

No 888, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: Replacement hiring—recruitment that seeks to replace positions vacated by workers who quit—is a prominent feature of empirical firm dynamics. We document this phenomenon by establishing a set of novel facts: 1) many establishments exhibit no net change in employment over time, despite nontrivial quit rates; 2) higher quit rates are associated with lower degrees of net inaction; 3) rates of inaction over net changes decay slowly by frequency (quarterly, yearly, bi-yearly etc.) suggesting that high-frequency net changes are exactly reversed at lower frequencies; 4) even among establishments that remain inactive, there is a substantial accumulation of gross turnover over time; and 5) direct measures of replacement hires account for a large fraction of total hires. A model of replacement hiring that is calibrated to match these empirical facts reveals a novel positive feedback channel through which an initial rise in vacancy posting in an expansion induces still more vacancy posting to replace employees who are poached. This vacancy chain in turn induces volatile responses of vacancies, and thereby unemployment, to cyclical shocks.

Date: 2017
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2017/paper_888.pdf (application/pdf)

Related works:
Working Paper: Vacancy Chains (2022)
Working Paper: VACANCY CHAINS (2020)
Working Paper: Vacancy Chains (2016)
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:sed017:888

Access Statistics for this paper

More papers in 2017 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().