The importance of two-sided heterogeneity for the cyclicality of labour market dynamics
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Date
2009-04-30T10:46:55Z
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Abstract
Using two data sets derived from German administrative data, including a linked
employer-employee data set, we investigate the cyclicality of worker and job flows.
The analysis stresses the importance of two-sided labour market heterogeneity in
this context, taking into account both observed and unobserved characteristics.
We find that small firms hire mainly unemployed workers, and that they do so
at the beginning of an economic expansion. Later on in the expansion, hirings
more frequently result from direct job-to-job transitions, with employed workers
moving to larger firms. Contrary to our expectations, workers moving to larger
firms do not experience significantly larger wage gains than workers moving to
smaller establishments. Furthermore, our econometric analysis shows that the
interaction of unobserved heterogeneities on the two sides of the labour market
plays a more important role for employed job seekers than for the unemployed.
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accessions, business cycle, employer-to-employer, job-to-job, linked employer-employee, separations, worker flows