Assessing Job Flows Across Countries: The Role of Industry, Firm Size and Regulations

By John C. Haltiwanger, S. Scarpetta, Helena Schweiger. 2006

243 citations recorded by the source corpus.

This paper analyzes job flows in a sample of 16 industrial and emerging economies over the past decade, exploiting a harmonized firm-level dataset. It shows that industry and firm size effects (and especially firm size) account for a large fraction in the overall variability in job flows. However, large residual differences remain in the job flow patterns across countries. To account for the latter, the paper explores the role of differences in employment protection legislation across countries. Using a difference-in-difference approach that minimizes possible endogeneity and omitted variable problems, our findings show that hiring and firing costs tend to curb job flows, particularly in those industries and firm size classes that require more frequent labor adjustment.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/ace1e640a93447eed93d7978d324080ff3b77e99

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Citations in the corpus

African Economic Outlook 2012 (2012, background): “Using a firm-level dataset for a set of 16 industrialised and developing countries, Haltiwanger et al. (2008) find that, although industry and firm size account for a large share of gross job flows, labour regulations are associated with lower job flows.”
The macroeconomic effects of goods and labor markets deregulation (2016, methodology): “Concerning the parameters that are specific to the product market, we set the firm exit rate, δ, such that gross steady-state job destruction accounted for by firm exit is 25 percent, the midpoint of estimates in Haltiwanger et al. (2006). (Their estimates for France, Germany, and Italy range betwee”
What Drives the Dynamics of Business Growth (2016, background): “Both of these features are consistent with Haltiwanger et al. (2012), who use US census data to show that young firms, rather than small firms contribute more proportionally to aggregate employment growth.”
Employment Protection Legislation, Adjustment Costs and Cross-Country Differences in Cost Behavior (2012, background): “…Pissarides (1999), Heckman et al. (2000), Blanchard and Portugal (2001), Besley and Burgess (2004), Botero et al. (2004), Boeri and Jimeno (2005), Haltiwanger et al. (2006), Micco and Pages (2006), Autor et al. (2007), Kugler and Pica (2008), Schivardi and Torrini (2008) document large…”
Setting It Right: Employment Protection, Labour Reallocation and Productivity (2011, methodology): “Moreover, EP, by raising labour adjustment costs, may also slow 11 Similar findings are reported by Haltiwanger et al. (2006), the only cross-country comparative study in the literature based on internationally harmonised data on job flows.”
Labor Market Regulations: What Do We Know About Their Impacts in Developing Countries? (2014, unknown): “A number of cross-country studies have shown that the strictness of EPL explains a signiﬁcant part of country variation in job and worker ﬂows (e.g., OECD 2004, 2010; Caballero et al. 2004; Micco and Page´s 2006; Haltiwanger, Scarpetta, and Schweiger 2008).”
Downward Nominal Wage Rigidity in the OECD (2008, unknown): “Inspired by the skewnesslocation approach of McLaughlin (1994), these studies focus on the effect of inflation on the distribution of wage changes; some of the recent applications are Kahn (1997), Christofides and Leung (2003), Lebow, Saks, and Wilson (2003), Nickell and Quintini (2003), Kuroda and ”
Knowledge-Based Capital, Innovation and Resource Allocation (2013, background): “By raising labour adjustment costs, stringent employment protection legislation (EPL) slows down the reallocation process (Haltiwanger et al., 2006) and aggregate productivity growth (see Bassanini et al.”
Tax Policy for Economic Recovery and Growth (2011, background): “When analysing the effect of the top personal income tax rate in the industry-level analysis, the interaction factor is an industryspecific measure of entrepreneurial activity, proxied by the rate of firm entry in the US, obtained from Haltiwanger et al. (2006).”
Labour Regulation and Employment Dynamics at the State Level in India (2009, unknown): “More broadly, increases in job turnover can help productivity and output growth (in part through better job matching), and therefore increase the pace at which incomes converge to those of more developed countries (see Caballero et al., 2004; Micco and Pagés, 2004; Haltiwanger et al., 2006).19 17.”
The Effect of Corporate Taxes on Investment and Entrepreneurship (2009, background): “These include a property rights index from the Heritage Foundation, and indicators of rigidity of employment laws from the Doing Business update of Botero et al. (2004); an index of a country's openness to trade; and, as a catch-all residual proxy for institutional quality, lagged per capita income ”
Cross Country Differences in Job Reallocation: The Role of Industry, Firm Size and Regulations (2014, unknown): “…fact emerging from the data is the large magnitude of gross job flows (the sum of job creation and job destruction) in all countries compared with net employment changes, both at the level of total economy and in manufacturing (see Table B.1 in the Appendix A and Haltiwanger et al., 2006 ).”
The Effect of Employment Protection Legislation and Financial Market Imperfections on Investment: Evidence from a Firm-Level Panel of EU Countries (2009, unknown): “At the cross-country level, Gomez-Salvador et al. (2004), Micco and Pages (2004) and Haltiwanger et al. (2006) among others exploit cross-country differences in EPL to establish a negative relationship between job flows and firing restrictions.”