cyclical trend of labor reallocation: transition and structural change
TRANSCRIPT
Cyclical trend of labor reallocation: transition and structural change
Stanisław Cichocki
Workshop of the DGO-Section for Economics, 14.10.2016
Group for Research in Applied Economics
Outline
1. Motivation
2. Literature review
3. Data
4. Time trends
5. Cyclical patterns
6. Conclusions
2
Motivation
• Two postulated features of labor reallocation during transition:
• Public vs. private sector
• Manufacturing vs. services
• Significant amount of literature for EE and FSU countries but…
• Focuses on early transition period
• Uses yearly data only
• No behavior over the business cyclebusiness cycle
3
Motivation
• Document the puzzle for Poland using labor market flows
• Analyze the trend and cyclical patterns of these flows
• cycle
4
Literature review
• Theoretical background:
• Aghion and Blanchard (1994)
• Caballero and Hammour (1996, 1998, 2000)
• Empirical studies:
• Multiple countries studies (Bilsen and Konings, 1998; Faggio and Konings, 2003)
• Single country studies (Haltiwanger and Vodopivec, 2002; De Loecker and Konings 2006)
5
Literature review
• Main results:
• High job destruction rates in SOE and manufacturing
• Vivid job creation in private and service sector
• But:
• Average destruction rates in SOE are not statistically larger than in the private sector (Svejnar et al., 2016)
• Job creation rates lower in SOE and manufacturing (Svejnar et al., 2016)
6
Literature review
• Job destruction and job creation gradually gained momentum (Brown and Earle, 2003)
• This time pattern was not uniform across all the countries (Svejnar et al., 2016)
• Literature focused on between sector flows but:
• Within sector reallocation fairly large for some countries (Haltiwanger and Vodopivec, 2002)
• Demographic flows play a role: youth entry and elderly exit
7
Data
• LFS for period: 1995q1-2015q1
• Types flows
• Flows from public to private sector (AB)
• Flows from manufacturing to service sector (CH)
• Flows from manufacturing in public sector to services in private sector (ABCH)
• Youth employment entry
• Elderly employment exit
8
Data
• Types flows
• Flows to/from manufacturing
• Flows to/from services
• Flows to/from public sector
• Flows to/from private sector
9
Data
10
Table 1. Descriptive statistics in the sample
Variable All years 1995-2005 2005-2015
Wage employed 33.7% 34.8% 33.0%
Unemployed 6.3% 8.3% 4.9%
Inactive 48.6% 43.3% 52.2%
Working in manufacturing 10.8% 11.8% 10.0%
- entering in observation window 1.5% 1.8% 1.1%
- exiting in observation window 3.7% 4.3% 3.0%
Working in services 13.8% 13.1% 14.3%
- entering in observation window 1.6% 2.2% 1.2%
- exiting in observation window 4.0% 4.7% 3.4%
Working in public sector 14.8% 19.5% 11.4%
- entering in observation window 1.8% 1.4% 2.4%
- exiting in observation window 4.4% 4.1% 5.0%
Working in the private sector 19.0% 15.3% 21.6%
- entering in observation window 3.7% 5.4% 2.8%
- exiting in observation window 1.5% 1.9% 1.3%
CH 0.7% 0.7% 0.6%
AB 2.5% 2.0% 3.1%
ABCH 0.1% 0.1% 0.1%
Youth entrant 0.4% 0.3% 0.4%
Elderly exit 0.1% 0.1% 0.1%
No of observations 4 839 546 1 781 121 3 058 425
Note: Polish LFS, 1995q1-2015q1, shares in total population, flows relative to the relevant population, youth
entrants and elderly leavers relative to total population. To compute flows, population weights were utilized.
Time trends: public sector
11
-3,5%
-3,0%
-2,5%
-2,0%
-1,5%
-1,0%
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
-300 000
-250 000
-200 000
-150 000
-100 000
-50 000
0
50 000
100 000
150 000
200 000
1995q1 1997q1 1999q1 2001q1 2003q1 2005q1 2007q1 2009q1 2011q1 2013q1 2015q1
worker inflows public sector
worker outflows public sector
worker flows from public to private (AB)
net demographic effect
deviations from trend log(GDP) - right axis
Note: Polish LFS, 1995q1-2015q1, deviations from trend (log) GDP from Hodrick-Prescott filtering with λ=1600, flows
seasonally adjusted with TRAMO/Seats.
Time trends: manufacturing
12
Note: Polish LFS, 1995q1-2015q1, deviations from trend (log) GDP from Hodrick-Prescott filtering with λ=1600, flows
seasonally adjusted with TRAMO/Seats.
-2,5%
-2,0%
-1,5%
-1,0%
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
-200 000
-150 000
-100 000
-50 000
-
50 000
100 000
150 000
200 000
1995q1 1997q1 1999q1 2001q1 2003q1 2005q1 2007q1 2009q1 2011q1 2013q1 2015q1
worker inflows manufacturing
worker outflows manufacturing
worker flows from manufacturing to services (CH)
net demographic effect
deviations from trend log(GDP) - right axis
Time trends: services
13
Note: Polish LFS, 1995q1-2015q1, deviations from trend (log) GDP from Hodrick-Prescott filtering with λ=1600, flows
seasonally adjusted with TRAMO/Seats.
-2,5%
-2,0%
-1,5%
-1,0%
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
-200 000
-150 000
-100 000
-50 000
0
50 000
100 000
150 000
200 000
1995q1 1997q1 1999q1 2001q1 2003q1 2005q1 2007q1 2009q1 2011q1 2013q1 2015q1
worker inflows services
worker outflows services
worker flows from services to manufacturing (opposite to CH)
net demographic effect
deviations from trend log(GDP) - right axis
Time trends
14
Note: Polish LFS, 1995q1-2015q1, deviations from trend (log) GDP from Hodrick-Prescott filtering with λ=1600, flows
seasonally adjusted with TRAMO/Seats.
-2,5%
-2,0%
-1,5%
-1,0%
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
-200 000
-150 000
-100 000
-50 000
-
50 000
100 000
150 000
200 000
1995q1 1997q1 1999q1 2001q1 2003q1 2005q1 2007q1 2009q1 2011q1 2013q1 2015q1
from public to private, no change of industry from private to public, no change of industryfrom services to manufacturing, no change of ownership from manufacturing to services, no change of ownership from public manufacturing to private service sector from private service sector to public manufacturingyouth employment flows elderly employment flowsdeviations from trend log(GDP)
Cyclical patterns
15
Table 2. Cyclical patterns of labor market flows
VARIABLES
AB CH Exits from manufacturing Exits from public sect.
cycle trend cycle trend cycle trend cycle trend
(1) (2) (3) (4) (5) (6) (7) (8)
GDP cycle 1.38 47.14* 11.09* 23.72*** 11.24** 12.59* 0.66 86.52**
(5.83) (31.92) (7.36) (11.50) (5.05) (8.38) (4.93) (38.24)
GDP trend 0.26 22.42*** -0.10 -15.23*** 0.36 -0.37 -0.62 7.80
(1.18) (9.52) (1.49) (3.43) (1.02) (2.50) (1.00) (11.41)
Interaction with period dummies
2000-2005 4.46 -0.13* 5.67 -0.07** 2.99 -0.03* 0.81 -0.09
(6.52) (0.09) (8.23) (0.03) (5.65) (0.02) (5.52) (0.10)
2005-2010 -1.05 -0.12 2.54 -0.00 -6.21 -0.07*** 1.60 -0.09
(8.06) (0.12) (10.16) (0.04) (6.98) (0.03) (6.81) (0.14)
2010-2015 3.65 -0.12 -16.80 -0.04 -12.00 -0.07** -0.17 -0.05
(10.06) (0.15) (12.69) (0.05) (8.71) (0.04) (8.51) (0.18)
Service employment 5.93 -7.62 -10.58 -3.09 -3.47 3.56 -3.78 -9.63
(5.04) (44.14) (6.36) (15.91) (4.36) (11.59) (4.26) (52.88)
Manufacturing employment -6.89 6.41 10.00 4.93 2.93 -3.46 3.14 6.72
(4.91) (42.71) (6.19) (15.39) (4.25) (11.21) (4.15) (51.17)
Private employment 0.73*** 2.76* 0.26 0.48 0.03 0.49 0.21 5.98***
(0.21) (1.54) (0.27) (0.55) (0.18) (0.40) (0.18) (1.84)
Public employment 1.21* 1.36 1.16 -1.69 1.67*** 0.45 1.90*** 4.82
(0.65) (5.04) (0.82) (1.82) (0.56) (1.32) (0.55) (6.04)
Constant -3.10 -219.50* 1.45 206.28*** -4.19 14.87 7.66 16.51
(14.50) (116.79) (18.30) (42.09) (12.56) (30.66) (12.26) (139.91)
Year FE Yes Yes Yes Yes Yes Yes Yes Yes
No of observations 78 78 78 78 78 78 78 78
R-squared 0.73 0.98 0.81 0.98 0.86 0.99 0.88 0.99
Note: Polish LFS, 1995q1-2015q1, cyclical component measure is a deviation from trend, following Hodrick-Prescott filtering with λ=1600, standard errors reported in
parentheses. *** denote significance at 5% level, ** at 10% and * at 15%. Unless stated otherwise, RHS variables are trend components in trend regressions and cycle
components in cycle regressions for LHS. Period 1995-2000 as base level.
Conclusions
• Theory: Two features of labor reallocation in EE and FSU countries
• Empirics: Reallocation paths more nuanced
• Worker flows between jobs rare
• What changed the employment structure:
• entry of young, exit of elderly workers
16
Conclusions
• Flows from public sector:
• no cyclical pattern, trends amplify in times of prosperity
• Shortcomings:
• one country
• data from 1995 on
17
Thank you for your attention! Author: Stanisław Cichocki e-mail: [email protected]
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