Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Job flows in Swedish manufacturing 1972-1996
Abstract: This paper deals with the heterogeneous employment outcome
at the plant level in Swedish manufacturing over the period 1972-96.
Non-negligible gross flows of jobs is found to be a pronounced feature in
Swedish manufacturing, but as compared to results on U.S. data, the average
pace of job reallocation has not been as high. However, masked behind low
averages are periods of large-scale job reallocation and, in particular, we
find that job reallocation exhibits a countercyclical movement.
of the observed heterogeneity in the plant-level employment outcome can be
explained by easily observable characteristics of the plant. Instead most
job reallocation takes place within narrowly defined sectors of the
manufacturing sector. Furthermore, the role for idiosyncrasies in
explaining the plant-level employment outcome becomes increasingly
important in times of contraction.
We find no evidence supporting the
hypothesis that large wage compression explains high job reallocation
rates. Investigating the covariance structure of job reallocation, we
instead find that, beside the net employment growth, the growth in
productivity is the single most influential factor.
These findings, we
like to believe, are consistent with theoretical models, which stress that
the process of growth and technology adoption involves a great deal of
experimentation. Accordingly, we find that these reallocative activities
have been important in accounting for the long-run growth in
Keywords: Job reallocation; Job destruction; Job creation; (follow links to similar papers)
JEL-Codes: J23; J60; (follow links to similar papers)
49 pages, October 12, 1999
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