The Dynamics of Worker Reallocation within and across Industries

In: Economica, Band 74, Heft 293, S. 1-20

Abstract

This paper uses an integrated employer–employee data‐set to answer two key questions: (i) What is the equilibrium amount of worker reallocation? (ii) How much does firm‐level job reallocation affect worker reallocation? About 26% of workers who had previously exhibited a substantial degree of attachment to their employer change jobs in a given year. About two‐thirds of this reallocation is roughly evenly split within and across broadly defined industries. Firm‐level job and worker reallocation substantially increases the probability of transition for even the most stable group of workers, even after controlling for individual characteristics and firm and industry tenure.