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Maliranta, Mika
Year of Publication: 
Series/Report no.: 
ETLA Discussion Papers No. 1177
Job flows are typically defined on the basis of the employment changes at the plant level. When calculated in this way, the job creation rate was 22.4% and destruction rate 23.8% in the Finnish business sector in the four-year period 2000-2004. However, when the different occupations (using seven occupational categories) in the same plant are interpreted as distinct jobs, the job creation rate is 30.6% and destruction rate 32.0%. It is found that employment mobility is much greater than needed for the given amount of the net employment change and intra- and inter-plant restructuring. This so-called 'excess worker reallocation' or 'churning' rate may be important for the diffusion of productivity spillovers in the economy or for the accumulation of the workers' human capital. The study examines the worker mobility between plants as well as along the occupational ladders in the plants' internal labor markets. It is found that micro-level dynamics of employment have interesting links with wage formation, and in particular, with its business cycle dynamics. This kind of knowledge is useful for theoretical modelling of business dynamics.
job flows
worker flows
occupational mobility
Document Type: 
Working Paper

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