Job Churn
Business Demography
and
Job Churn Workshop
May 2011
Outline
- The Motivation
- The Sources
- The Methodology
- The Story (a chapter or two)
- The Possibilities
John.Dunne@cso.ie
The Motivation - Context
€bn
190
% 16
14
170
12
150
10
130
8
6
110
GDP at constant market prices (€bn)
90
GNP at constant market prices (€bn)
ILO Unemployment Rates Q3 (%)
70
2004
2005
2006
2007
2008
2009
2010
Increased demand for information on jobs
Less financial resources
New opportunities to exploit administrative data
A methodology already outlined in research literature
4
2
0
The Motivation – Policy value
Contribute to
Identification of employment opportunities (Short term)
Evaluating and targeting (re)training
Jobs policy (Long term)
(Medium term)
The Sources – the analysis file
CSO
Business
Register
EMR ID
CBR ID
Legal form
Activity
Revenue
Employer
Employee Tax
returns
EMR ID
PPSN
Class
Weeks
Pay
DSP
Client record
System
PPSN
DOB
Gender
Nationality
Integrated and depersonalised for multi-purpose analysis
SPP35 Analysis file for each reference year
CSOPPSN
CBR ID
Month of birth, Sex, Nationality
Activity (NACE Rev 2), Legal form
Weeks, Reckonable pay
The Sources - strengths
– Links information on employer and employees
– Comprehensive
– High quality
– Consistent
The Sources - weaknesses
For administrative purposes
As is (warts and all / legal record)
Not perfect
No point in time (Concurrent v Consecutive records, seasonality)
Timeliness (10 months after reference period end)
Business register (on going quality enhancement)
The Sources – Added opportunities
Other indicators
– Job volume
– Job value
(Sum of weeks | years worked)
(Sum of reckonable pay recorded)
– Job quality
(Mean weekly reckonable pay)
The Methodology – illustrating by simple example
A firm has 10 paid employees
on books in 2008
An firm has 12 paid employees
on books in 2009
The firm has 4 paid workers on
books in 2009 that don’t
exist in 2008 (Hirings)
The firm has 2 paid workers on
books in 2008 that don’t
exist in 2009 (Separations)
Ref Year 2009
Hirings (H) = 4
Job Creation (JC) = 2
Separations (S) = 2
Job Destruction (JD) = 0
Job Churn (CH) = 4
The Methodology – building blocks
For two timepoints/periods in enterprise/employee data
At the person level
Hirings (H)
Separations (S)
Job stayers (JS)
At the enterprise level
Job creation (JC)
Job destruction (JD)
An identity
The Methodology – calculations (job reallocation / job turnover)
Total job reallocation (REALJ) refers to the sum of job creation (JC) and job
destruction (JD) for a group of enterprises.
Excess job reallocation (EXCJ) for a group of enterprises is defined as the
difference between total job reallocation (REALJ) and the absolute net
change in total employment ( |JC - JD| ), for group j at period t.
Excess job reallocation provides a measure of the offsetting job creation and
job destruction within a group of firms.
The Methodology– calculations (worker reallocation / worker turnover)
Total worker reallocation (REALW) is calculated by summing hirings (H)
and separations (S) over all members of a specified group, the group
can be defined either by a group of enterprises or on a set of
particular demographic characteristics (age, gender etc).
Excess worker reallocation (REALW) for a group is defined as the
difference between total worker reallocation (REALW) and the group’s
absolute net change in employment (|H - S|). So for group j at period
t,
Excess worker reallocation provides a useful measure of the number of
excess new person job matches over and above the minimum necessary to
accommodate net employment growth/decline; in other words, it reflects
the reallocation of job matches (reshuffling of jobs and workers) within the
same group (Bassanini & Marianna, 2009).
The Methodology – calculations (Job churn / churning flows)
At the enterprise level or any group of enterprises, churning flows
(CH) is the difference between excess worker reallocation and excess
job reallocation.
Churning flows represent labour reallocation arising from enterprises
churning workers through continuing jobs or employees quitting and
being replaced on those jobs. So for group j in period t
The Story – Chapter JCA02 (Firm based components)
Primary components for Business Economy (Employment records)
900000
Hirings
Separations
800000
Job creation
700000
Job destruction
600000
500000
400000
300000
200000
100000
0
2006
2007
2008
People less likely to leave their jobs in a downturn
- > Job churn is pro cyclical
2009
The Story – Chapter JCA02 (A comparison - Environment)
Finland
- end of 80s high growth and overheating
-deep recession at start of 90s due to internal and external shocks that included
collapse of Soviet Union, slowdown in Western Europe, severe banking crisis due to
deregulation. ( Ilmakunnas 2001 )
The Story – Chapter JCA02 (A comparison – Primary components)
The Story – Chapter JCA02 (Selected Sectors)
Sectoral view
Sector C Manufacturing
Sector E Water supply, sewage ....
Sector F Construction
Sector G Wholesale and retail trade
Sector H Transportation and storage
Sector I Accommodation and food
Sector J Information and communication
The Story – Chapter JCA01 ( Who are the separations? )
The Story – Chapter JCA03 (Re-employment of persons separating)
Primary separations
With no new
employment
Primary
separations
With new
employment
Construction
Business
economy
of companies
holding (B to
Industry
to(F)
E) services
Business (B
economy
excludingexcluding
activitiesactivities
of holding
companies
(G toNumber
N,-642)
24223
68155
43932
19053
52830
33777
N,-642) 2006
2006
Number
113296
362803
249507
cent
(36)
(100)
(64)
2006 Per
Number
156572
483788
327216
Per
cent
(31)
(100)
(69)
29011
79224
50213
2007 Number
22152
57998
35846
Per cent
(32)
(100)
(68)
2007
Number
112657
395016
282359
(37)
(63)
cent
(38)
(100)
(62)
2007 Per
Number
163820
532238
368418
Per
(29)
(100)
(71)
43424
94859
51435
2008 Number
24416
59436
35020
Per cent
cent
(31)
(100)
(69)
2008
Number
137166
431906
294740
cent
(46)
(100)
(54)
(41)
(59)
2008 Per
Number
205006
586201
381195
Per
(32)
(100)
(68)
58952
93795
34843
2009 Number
35027
68436
33409
Per cent
cent
(35)
(100)
(65)
2009
Number
187274
438509
251235
(63)
(37)
cent
(51)
(100)
(49)
2009 Per
Number
281253
600740
319487
Per
(43)
(100)
(57)
Per cent
cent
(47)
(100)
(53)
The Story – Chapter JCA04 (Where are separations re-employed?)
Sectoral distribution of re-employed separations (2009)
B to N,-642
C
F
G
I
N
Business economy excluding activities of holding companies (B to N,-642)
Number
270112
25792
22024
78360
Per cent
(100)
(10)
(8)
(29)
43788
(16)
37207
(14)
Manufacturing (C)
Number
Per cent
26175
(100)
10485
(40)
1532
(6)
6394
(24)
1794
(7)
2522
(10)
Construction (F)
Number
Per cent
30493
(100)
2772
(9)
13522
(44)
3706
(12)
2177
(7)
4260
(14)
Wholesale and retail trade; repair of motor vehicles and motorcycles (G)
Number
72824
4860
1751
42571
Per cent
(100)
(7)
(2)
(58)
7479
(10)
6320
(9)
Accommodation and food service activities (I)
Number
43975
1732
Per cent
(100)
(4)
962
(2)
9002
(20)
23590
(54)
4157
(9)
Administrative and support service activities (N)
Number
39872
2842
Per cent
(100)
(7)
2160
(5)
7384
(19)
4828
(12)
13365
(34)
The Story – (Where might new jobs come from?)
Ilmakunnas (2001)
The Possibilities – (Business register, geo spatial, other data sources)
Business characteristics (Location/county,
firm status –
expanding/contracting, trade indicator, coverage
beyond business economy, Foreign controlled)
Geo- spatial (Introduction of
post codes, employee
and employer location, admin data quality)
Other data sources (
FAS, Live Register, .... )
The References
Bassanini, A., & Marianna, P. (2009). Looking inside the perpetual motion machine: job and
worker flows in OECD countries. Retrieved from http://www.oecd.org.
Burgess, S., Lane, J., & Stevens, D. (2000). Job Flows, Worker Flows and Churning. Journal
of Labor Economics , 18 (3).
Fox, R. (2009, June). Job Opportunities in the Downturn. Retrieved March 15, 2011, from
http://www.fas.ie/NR/rdonlyres/9ABC5EE1-CF20-4AA5-ACA4C5B81DD9FE5E/793/jobsdownturn96.pdf
Guertzgen, N. (2007). Job and Worker reallocation in German establishments: the role of
employers' wage policies and labour market equilibriums. Discussion paper, Centre for
European Economic Research, Mannheim.
Ilmakunnas, P., & Maliranta, M. (2001). The turnover of jobs and workers in a deep recession:
evidence from the Finnish business sector. Helsinki School of Economics and Business
Administration; The Research Institute of the Finnish Economy. Helsinki: The Research
Institute of the Finnish Economy.
Lawless M & Murphy A, (2008). Job turnover in Irish Manufacturing 1972-2006. The
Economic and Social Review, Vol. 39, No. 3, Winter 2008, pp235 - 256
Li, D. (2010). Job reallocation and labour mobility among heterogeneous firms in Norway.
Working Paper, Ragnar Frisch Centre for Economic Research.
http://www.cso.ie/surveysandmethodologies/surveys/construction/Jobchurn.htm
Thank you
John.Dunne@cso.ie