Ilmakunnas, Pekka Johansson, Edvard Maliranta, Mika
Year of Publication:
ETLA discussion paper 1134
Analyses in this paper do not support the idea that job and worker flows have become more intensive and have deteriorated working conditions in the Finnish business sector. The magnitude of flow has in fact been rather stable since 1997. However, job flows are at a quite high level, as some 10% of jobs are destroyed every year. On the other hand, an even larger number of new jobs are created every year, resulting in positive net job creation. At the industry level, we find no relationship between working conditions and job flows. Job flows require worker mobility. Worker flows are nevertheless more than 100% larger than what job flows would require. Job flows constitute a central element of the mechanism through which technological change and productivity growth takes place in an economy. Quite normally, some 30-50% of an industry's productivity growth is due to this particular mechanism. Disruptions to this mechanism would have considerable effects on productivity growth and thereby the improvement of living standards.
Job and worker flows working conditions productivity technological change