Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria

Abstract

We study Austrian job reallocation in the period of 1978 to 1998, using a large administrative dataset where we correct for "spurious" entries and exits of firms. We find that on average 9 out of 100 randomly selected jobs were created within the last year, and that about 9 out of randomly selected 100 jobs will be destroyed within the next year. Hence, Austrian job flows seem to be of comparable magnitude as in other countries, similar to the well-known results of Davis et al. (1996) for the United States. Job reallocation appears to be driven primarily by idiosyncratic shocks. However, job creation increases significantly during cyclical upswings whereas job destruction rises in downturns. We also find substantial persistence of job creation and destruction. We show that the pronounced pattern of job reallocation rates falling with firm size and age continues to hold when we use a set of controls.Finally, we show that -controlling for sector and for firm size composition -Austrian job reallocation rates are only half the rates for the U. S. This result is not surprising given the impact of tighter regulation and labor law in Austria.

Non-Wage Job Values and Implications for Inequality

“…Job creation and job destruction rates in most industries are comparable to those in the US (Stiglbauer et al, 2003). Between 1996 and 2011, the Austrian labor market was characterized by relatively steady conditions.…”

“…My analyses are based on Austria, a labor market more comparable to the US than others in Europe, for example, regarding the unemployment rate and labor turnover (Stiglbauer et al, 2003). I use employer-to-employer transitions in Austrian administrative data between 1996 and 2011.…”

Labour Market Effects of Trade in a Small Open Economy

“…A series of plausibility checks have been carried out to ensure that business units are properly defined. Most of the observations are small firms, which are likely to be at the enterprise level, because having one account reduces administrative burdens when reporting social security contributions (Stiglbauer et al 2003). Moreover, the analysis is limited to manufacturing sector.…”

Dinámica laboral de la industria en Chile

“…Así por ejemplo, mientras la creación de empleo es procíclica, la destrucción es contracíclica (es decir, tiende a ser menor en períodos de auge económico), aunque no existe simetría entre ambas y la destrucción tiende a ser más volátil (Campbell y Fisher, 1998). La tasa de rotación de empleo no presenta un vínculo claro respecto del ciclo económico: mientras en los Estados Unidos hay evidencia de que es contracíclica (Schuh y Triest, 1998), en algunos países europeos y Colombia y Marruecos la evidencia es opuesta (Stigelbauer, Stahl y otros, 2002;Boeri, 1996;Roberts, 1996). La entrada y salida de firmas, por su parte, son componentes importantes de la dinámica laboral y explican una parte significativa de los flujos de empleo (Castillo, Cesa y otros, 2002;Barnes y Haskel, 2002).…”