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

This paper reviews the process of job creation and destruction across a sample of 16 industrial and emerging economies over the past decade. It exploits a harmonized firm-level data set drawn from business registers and enterprise census data. The paper assesses the importance of technological facto...

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Main Authors:	Haltiwanger, John, Scarpetta, Stefano, Schweiger, Helena
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	AFFECTED WORKERS BUSINESS ENVIRONMENT COUNTRY EFFECTS COUNTRY LEVEL CREATIVE DESTRUCTION CROSS-COUNTRY ANALYSES CROSS-COUNTRY DIFFERENCES DOWNSIZING ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT PROTECTION LEGISLATION ENTERPRISE RESTRUCTURING ENTRY COSTS FIRING COSTS FIRM DYNAMICS FIRM ENTRY FIRM EXIT FIRM SIZE FIRM TURNOVER HIGH CORRELATION JOB CREATION JOB DESTRUCTION JOB DESTRUCTION RATE JOB FLOWS JOB LOSSES JOB REALLOCATION JOB TURNOVER JOBS LABOR ADJUSTMENT LABOR ADJUSTMENT COSTS LABOR MARKET LABOR MARKET REGULATIONS LABOR MOBILITY LABOR REALLOCATION LABOR REGULATIONS LABOUR LATIN AMERICAN MEASUREMENT ERRORS NEGATIVE EFFECT NET EMPLOYMENT POLICY ENVIRONMENT POLICY RESEARCH PREVIOUS SECTION PREVIOUS STUDIES PRIVATE FIRMS PRODUCING GOODS PRODUCT MARKET PRODUCT MARKET REGULATIONS PRODUCT MARKETS PRODUCTION PROCESS PRODUCTIVITY GROWTH RELATIVE IMPORTANCE SELF EMPLOYED SERVICE INDUSTRY SIGNIFICANT DIFFERENCES SIZE OF FIRMS SMALL FIRMS TOTAL EMPLOYMENT UNEMPLOYMENT WAGE BARGAINING WORKERS
Online Access:	http://documents.worldbank.org/curated/en/2006/11/7208859/assessing-job-flows-across-countries-role-industry-firm-size-regulations http://hdl.handle.net/10986/8873

id	okr-10986-8873
recordtype	oai_dc
spelling	okr-10986-88732021-04-23T14:02:41Z Assessing Job Flows across Countries: The Role of Industry, Firm Size, and Regulations Haltiwanger, John Scarpetta, Stefano Schweiger, Helena AFFECTED WORKERS BUSINESS ENVIRONMENT COUNTRY EFFECTS COUNTRY LEVEL CREATIVE DESTRUCTION CROSS-COUNTRY ANALYSES CROSS-COUNTRY DIFFERENCES DOWNSIZING ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT PROTECTION LEGISLATION ENTERPRISE RESTRUCTURING ENTRY COSTS FIRING COSTS FIRM DYNAMICS FIRM ENTRY FIRM EXIT FIRM SIZE FIRM TURNOVER HIGH CORRELATION JOB CREATION JOB DESTRUCTION JOB DESTRUCTION RATE JOB FLOWS JOB LOSSES JOB REALLOCATION JOB TURNOVER JOBS LABOR ADJUSTMENT LABOR ADJUSTMENT COSTS LABOR MARKET LABOR MARKET REGULATIONS LABOR MOBILITY LABOR REALLOCATION LABOR REGULATIONS LABOUR LATIN AMERICAN MEASUREMENT ERRORS NEGATIVE EFFECT NET EMPLOYMENT POLICY ENVIRONMENT POLICY RESEARCH PREVIOUS SECTION PREVIOUS STUDIES PRIVATE FIRMS PRODUCING GOODS PRODUCT MARKET PRODUCT MARKET REGULATIONS PRODUCT MARKETS PRODUCTION PROCESS PRODUCTIVITY GROWTH RELATIVE IMPORTANCE SELF EMPLOYED SERVICE INDUSTRY SIGNIFICANT DIFFERENCES SIZE OF FIRMS SMALL FIRMS TOTAL EMPLOYMENT UNEMPLOYMENT WAGE BARGAINING WORKERS This paper reviews the process of job creation and destruction across a sample of 16 industrial and emerging economies over the past decade. It exploits a harmonized firm-level data set drawn from business registers and enterprise census data. The paper assesses the importance of technological factors that characterize different industries in explaining cross-country differences in job flows. It shows that industry effects play an important role in shaping job flows at the aggregate level. Even more importantly, differences in the size composition of firms-within each industry-explain a large fraction of the overall variability in job creation and destruction. However, even after controlling for industry/technology and size factors there remain significant differences in job flows across countries that could reflect differences in business environment conditions. The authors look at one factor shaping the business environment, namely, regulations on hiring and firing of workers. To minimize possible endogeneity and omitted variable problems associated with cross-country regressions, we use a difference-in-difference approach. The empirical results suggest that stringent hiring and firing costs reduce job turnover, especially in those industries that require more frequent labor adjustment. Regulations also distort the patterns of industry/size flows. Within each industry, medium and large firms are more severely affected by stringent labor regulations, while small firms are less affected, probably because they are partially exempted from such regulations or can more easily circumvent them. 2012-06-22T20:46:22Z 2012-06-22T20:46:22Z 2006-11 http://documents.worldbank.org/curated/en/2006/11/7208859/assessing-job-flows-across-countries-role-industry-firm-size-regulations http://hdl.handle.net/10986/8873 English en_US Policy Research Working Paper; No. 4070 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	AFFECTED WORKERS BUSINESS ENVIRONMENT COUNTRY EFFECTS COUNTRY LEVEL CREATIVE DESTRUCTION CROSS-COUNTRY ANALYSES CROSS-COUNTRY DIFFERENCES DOWNSIZING ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT PROTECTION LEGISLATION ENTERPRISE RESTRUCTURING ENTRY COSTS FIRING COSTS FIRM DYNAMICS FIRM ENTRY FIRM EXIT FIRM SIZE FIRM TURNOVER HIGH CORRELATION JOB CREATION JOB DESTRUCTION JOB DESTRUCTION RATE JOB FLOWS JOB LOSSES JOB REALLOCATION JOB TURNOVER JOBS LABOR ADJUSTMENT LABOR ADJUSTMENT COSTS LABOR MARKET LABOR MARKET REGULATIONS LABOR MOBILITY LABOR REALLOCATION LABOR REGULATIONS LABOUR LATIN AMERICAN MEASUREMENT ERRORS NEGATIVE EFFECT NET EMPLOYMENT POLICY ENVIRONMENT POLICY RESEARCH PREVIOUS SECTION PREVIOUS STUDIES PRIVATE FIRMS PRODUCING GOODS PRODUCT MARKET PRODUCT MARKET REGULATIONS PRODUCT MARKETS PRODUCTION PROCESS PRODUCTIVITY GROWTH RELATIVE IMPORTANCE SELF EMPLOYED SERVICE INDUSTRY SIGNIFICANT DIFFERENCES SIZE OF FIRMS SMALL FIRMS TOTAL EMPLOYMENT UNEMPLOYMENT WAGE BARGAINING WORKERS
spellingShingle	AFFECTED WORKERS BUSINESS ENVIRONMENT COUNTRY EFFECTS COUNTRY LEVEL CREATIVE DESTRUCTION CROSS-COUNTRY ANALYSES CROSS-COUNTRY DIFFERENCES DOWNSIZING ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPLOYMENT EMPLOYMENT GROWTH EMPLOYMENT PROTECTION LEGISLATION ENTERPRISE RESTRUCTURING ENTRY COSTS FIRING COSTS FIRM DYNAMICS FIRM ENTRY FIRM EXIT FIRM SIZE FIRM TURNOVER HIGH CORRELATION JOB CREATION JOB DESTRUCTION JOB DESTRUCTION RATE JOB FLOWS JOB LOSSES JOB REALLOCATION JOB TURNOVER JOBS LABOR ADJUSTMENT LABOR ADJUSTMENT COSTS LABOR MARKET LABOR MARKET REGULATIONS LABOR MOBILITY LABOR REALLOCATION LABOR REGULATIONS LABOUR LATIN AMERICAN MEASUREMENT ERRORS NEGATIVE EFFECT NET EMPLOYMENT POLICY ENVIRONMENT POLICY RESEARCH PREVIOUS SECTION PREVIOUS STUDIES PRIVATE FIRMS PRODUCING GOODS PRODUCT MARKET PRODUCT MARKET REGULATIONS PRODUCT MARKETS PRODUCTION PROCESS PRODUCTIVITY GROWTH RELATIVE IMPORTANCE SELF EMPLOYED SERVICE INDUSTRY SIGNIFICANT DIFFERENCES SIZE OF FIRMS SMALL FIRMS TOTAL EMPLOYMENT UNEMPLOYMENT WAGE BARGAINING WORKERS Haltiwanger, John Scarpetta, Stefano Schweiger, Helena Assessing Job Flows across Countries: The Role of Industry, Firm Size, and Regulations
relation	Policy Research Working Paper; No. 4070
description	This paper reviews the process of job creation and destruction across a sample of 16 industrial and emerging economies over the past decade. It exploits a harmonized firm-level data set drawn from business registers and enterprise census data. The paper assesses the importance of technological factors that characterize different industries in explaining cross-country differences in job flows. It shows that industry effects play an important role in shaping job flows at the aggregate level. Even more importantly, differences in the size composition of firms-within each industry-explain a large fraction of the overall variability in job creation and destruction. However, even after controlling for industry/technology and size factors there remain significant differences in job flows across countries that could reflect differences in business environment conditions. The authors look at one factor shaping the business environment, namely, regulations on hiring and firing of workers. To minimize possible endogeneity and omitted variable problems associated with cross-country regressions, we use a difference-in-difference approach. The empirical results suggest that stringent hiring and firing costs reduce job turnover, especially in those industries that require more frequent labor adjustment. Regulations also distort the patterns of industry/size flows. Within each industry, medium and large firms are more severely affected by stringent labor regulations, while small firms are less affected, probably because they are partially exempted from such regulations or can more easily circumvent them.
format	Publications & Research :: Policy Research Working Paper
author	Haltiwanger, John Scarpetta, Stefano Schweiger, Helena
author_facet	Haltiwanger, John Scarpetta, Stefano Schweiger, Helena
author_sort	Haltiwanger, John
title	Assessing Job Flows across Countries: The Role of Industry, Firm Size, and Regulations
title_short	Assessing Job Flows across Countries: The Role of Industry, Firm Size, and Regulations
title_full	Assessing Job Flows across Countries: The Role of Industry, Firm Size, and Regulations
title_fullStr	Assessing Job Flows across Countries: The Role of Industry, Firm Size, and Regulations
title_full_unstemmed	Assessing Job Flows across Countries: The Role of Industry, Firm Size, and Regulations
title_sort	assessing job flows across countries: the role of industry, firm size, and regulations
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/11/7208859/assessing-job-flows-across-countries-role-industry-firm-size-regulations http://hdl.handle.net/10986/8873
_version_	1764406695011811328

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

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