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Job Churn Business Demography and Job Churn Workshop May 2011Outline - The Motivation - The Motivation - The Sources - The Sources - The Methodology -

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Presentation on theme: "Job Churn Business Demography and Job Churn Workshop May 2011Outline - The Motivation - The Motivation - The Sources - The Sources - The Methodology -"— Presentation transcript:

1 Job Churn Business Demography and Job Churn Workshop May 2011Outline - The Motivation - The Motivation - The Sources - The Sources - The Methodology - The Methodology - The Story (a chapter or two) - The Story (a chapter or two) - The Possibilities

2 The Motivation - Context Increased demand for information on jobs Less financial resources New opportunities to exploit administrative data A methodology already outlined in research literature

3 Contribute to  Identification of employment opportunities (Short term)  Evaluating and targeting (re)training (Medium term)  Jobs policy (Long term) The Motivation – Policy value

4 The Sources – the analysis file CSO Business Register EMR ID CBR ID Legal form Activity Revenue Employer Employee Tax returns EMR ID PPSN Class Weeks Pay DSP Client record System PPSN DOB Gender Nationality SPP35 Analysis file for each reference year CSOPPSN CBR ID Month of birth, Sex, Nationality Activity (NACE Rev 2), Legal form Weeks, Reckonable pay Integrated and depersonalised for multi-purpose analysis

5 The Sources - strengths – Links information on employer and employees – Comprehensive – High quality – Consistent

6 The Sources - weaknesses For administrative purposes As is (warts and all / legal record) Not perfect No point in time (Concurrent v Consecutive records, seasonality) Timeliness (10 months after reference period end) Business register (on going quality enhancement)

7 The Sources – Added opportunities Other indicators – Job volume (Sum of weeks | years worked) – Job value (Sum of reckonable pay recorded) – Job quality (Mean weekly reckonable pay)

8 A firm has 10 paid employees on books in 2008 An firm has 12 paid employees on books in 2009 The firm has 4 paid workers on books in 2009 that don’t exist in 2008 (Hirings) The firm has 2 paid workers on books in 2008 that don’t exist in 2009 (Separations) The Methodology – illustrating by simple example Ref Year 2009 Hirings (H) = 4 Job Creation (JC) = 2 Separations (S) = 2 Job Destruction (JD) = 0 Job Churn (CH) = 4

9 The Methodology – building blocks For two timepoints/periods in enterprise/employee data At the person level Hirings (H) Separations (S) Job stayers (JS) At the enterprise level Job creation (JC) Job destruction (JD) An identity

10 The Methodology – calculations (job reallocation / job turnover) Total job reallocation (REALJ) refers to the sum of job creation (JC) and job destruction (JD) for a group of enterprises. Excess job reallocation (EXCJ) for a group of enterprises is defined as the difference between total job reallocation (REALJ) and the absolute net change in total employment ( |JC - JD| ), for group j at period t. Excess job reallocation provides a measure of the offsetting job creation and job destruction within a group of firms.

11 The Methodology – calculations (worker reallocation / worker turnover) Total worker reallocation (REALW) is calculated by summing hirings (H) and separations (S) over all members of a specified group, the group can be defined either by a group of enterprises or on a set of particular demographic characteristics (age, gender etc). Excess worker reallocation (REALW) for a group is defined as the difference between total worker reallocation (REALW) and the group’s absolute net change in employment (|H - S|). So for group j at period t, Excess worker reallocation provides a useful measure of the number of excess new person job matches over and above the minimum necessary to accommodate net employment growth/decline; in other words, it reflects the reallocation of job matches (reshuffling of jobs and workers) within the same group (Bassanini & Marianna, 2009).

12 The Methodology – calculations (Job churn / churning flows) At the enterprise level or any group of enterprises, churning flows (CH) is the difference between excess worker reallocation and excess job reallocation. Churning flows represent labour reallocation arising from enterprises churning workers through continuing jobs or employees quitting and being replaced on those jobs. So for group j in period t

13 The Story – Chapter JCA02 (Firm based components) Primary components for Business Economy (Employment records) People less likely to leave their jobs in a downturn - > Job churn is pro cyclical

14 The Story – Chapter JCA02 (A comparison - Environment) Finland - end of 80s high growth and overheating -deep recession at start of 90s due to internal and external shocks that included collapse of Soviet Union, slowdown in Western Europe, severe banking crisis due to deregulation. ( Ilmakunnas 2001 )

15 The Story – Chapter JCA02 (A comparison – Primary components)

16 The Story – Chapter JCA02 (Selected Sectors) Sectoral view Sector C Manufacturing Sector E Water supply, sewage.... Sector F Construction Sector G Wholesale and retail trade Sector H Transportation and storage Sector I Accommodation and food Sector J Information and communication

17 The Story – Chapter JCA01 ( Who are the separations? )

18 The Story – Chapter JCA03 (Re-employment of persons separating) Primary separations With no new employment Primary separations With new employment Construction (F) 2006 Number Per cent(36)(100)(64) 2007 Number Per cent(37)(100)(63) 2008 Number Per cent(46)(100)(54) 2009 Number Per cent(63)(100)(37) Industry (B to E) 2006 Number Per cent(36)(100)(64) 2007 Number Per cent(38)(100)(62) 2008 Number Per cent(41)(100)(59) 2009 Number Per cent(51)(100)(49) Business economy services excluding activities of holding companies (G to N,-642) 2006 Number Per cent(31)(100)(69) 2007 Number Per cent(29)(100)(71) 2008 Number Per cent(32)(100)(68) 2009 Number Per cent(43)(100)(57) Business economy excluding activities of holding companies (B to N,-642) 2006 Number Per cent(32)(100)(68) 2007 Number Per cent(31)(100)(69) 2008 Number Per cent(35)(100)(65) 2009 Number Per cent(47)(100)(53)

19 The Story – Chapter JCA04 (Where are separations re-employed?) Sectoral distribution of re-employed separations (2009) B to N,-642CFGIN Business economy excluding activities of holding companies (B to N,-642) Number Per cent(100)(10)(8)(29)(16)(14) Manufacturing (C) Number Per cent(100)(40)(6)(24)(7)(10) Construction (F) Number Per cent(100)(9)(44)(12)(7)(14) Wholesale and retail trade; repair of motor vehicles and motorcycles (G) Number Per cent(100)(7)(2)(58)(10)(9) Accommodation and food service activities (I) Number Per cent(100)(4)(2)(20)(54)(9) Administrative and support service activities (N) Number Per cent(100)(7)(5)(19)(12)(34)

20 The Story – (Where might new jobs come from?) Ilmakunnas (2001)

21 General Administrative data Low cost Provide insights Indicative No legislative req Noise Sources of error Admin restructuring Timeliness Business Demography The Considerations – (Admin data, resources, methodology) Insights Worker reallocation, Job reallocation, Job churn Within firm re- configuration Within sector re- configuration Employment records, volume, value, mean weekly reckonable pay Stocks and Flows

22 Business characteristics (Location/county, firm status – expanding/contracting, trade indicator, coverage beyond business economy, Foreign controlled) Geo- spatial (Introduction of post codes, employee and employer location, admin data quality) Other data sources ( FAS, Live Register,.... ) The Possibilities – (Business register, geo spatial, other data sources)

23 The References Bassanini, A., & Marianna, P. (2009). Looking inside the perpetual motion machine: job and worker flows in OECD countries. Retrieved from Burgess, S., Lane, J., & Stevens, D. (2000). Job Flows, Worker Flows and Churning. Journal of Labor Economics, 18 (3). Fox, R. (2009, June). Job Opportunities in the Downturn. Retrieved March 15, 2011, from C5B81DD9FE5E/793/jobsdownturn96.pdf Guertzgen, N. (2007). Job and Worker reallocation in German establishments: the role of employers' wage policies and labour market equilibriums. Discussion paper, Centre for European Economic Research, Mannheim. Ilmakunnas, P., & Maliranta, M. (2001). The turnover of jobs and workers in a deep recession: evidence from the Finnish business sector. Helsinki School of Economics and Business Administration; The Research Institute of the Finnish Economy. Helsinki: The Research Institute of the Finnish Economy. Lawless M & Murphy A, (2008). Job turnover in Irish Manufacturing The Economic and Social Review, Vol. 39, No. 3, Winter 2008, pp Li, D. (2010). Job reallocation and labour mobility among heterogeneous firms in Norway. Working Paper, Ragnar Frisch Centre for Economic Research.

24 Thank you


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