Using Worker Flows in the Analysis of Establishment Turnover: Evidence from Germany

• Activity Number: 471
• Type: Contributed
• Date/Time: Wednesday, August 4, 2010 : 8:30 AM to 10:20 AM
• Sponsor: Section on Government Statistics
• Author(s): Tanja Hethey*+ and Johannes F. Schmieder
• Companies: Institute for Employment Research and Columbia University
• Keywords: establishment turnover ; worker flows ; job turnover ; firm dynamics

Abstract

In Germany one widely used dataset to analyze establishment turnover is the establishment history panel (BHP). The dataset consists of annual employment notifications aggregated on establishment level. Previous research has relied on the first and last appearance of the establishment identifier in the BHP to identify openings and closings. We improve on this approach enriching the BHP with worker-flow information between establishments from 1975 to 2004. This allows us to credibly identify as well as classify entries and exits in a more detailed way. We show that many entries and exits of establishment identifiers do not correspond to true openings and closings but correspond to ID changes or spin-offs from other establishments. In a second step we analyze job creation and destruction based on establishment turnover to show the importance of controlling for such spurious entry and exit.