The Cyclical Behovior of the Gross Flows of U.S. Workers

THE U.S. LABOR MARKET iS characterized by high rates ofjob creation and job destruction, and by large flows of workers into and out of employment. In a previous paper, we developed a conceptual framework to interpret the dynamic behavior of both the levels, or stocks, of employment, unemployment, and vacancies as well as the flows into and out of these states.' At that time, we focused only on the behavior of stocks without examining the behavior of the flows themselves. In this paper, we intend to rectify that by refining and extending the pictures both of job creation and destruction, and of the flows of workers sketched in our earlier paper. We rely on three data sets. Our primary data source is the Current Population Survey (CPS), which gives monthly gross flows of workers between employment, unemployment, and "not in the labor force." These data cover the period 1968-86 and are disaggregated by age and sex. Whenever available, we use the data as corrected by John Abowd and Arnold Zellner.2 The other two sets cover manufacturing, and are

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