Department of Economics and Business Economics

Employer-to-Employer Transitions and Time Aggregation Bias

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  • Antoine Bertheau, University of Copenhagen
  • ,
  • Rune Vejlin

The rate at which workers switch employers without experiencing a spell of unemployment is one of the most important labor market indicators. However, Employer-to-Employer (EE) transitions are hard to measure in widely used matched employer-employee datasets such as those available in the US. We investigate how the lack of the exact start and end dates for job spells affect the level and cyclicality of EE transitions using Danish data containing daily information on employment relationships. Defining EE transitions based on quarterly data overestimates the EE transition rate by approximately 30% compared to daily data. The bias is procyclical and is reduced by more than 10% in recessions. We propose an algorithm that uses earnings and not just start and end dates of jobs to redefine EE transitions. Our definition performs better than definitions used in the literature.

Original languageEnglish
Article number102130
JournalLabour Economics
Publication statusPublished - Apr 2022

Bibliographical note

Publisher Copyright:
© 2022 The Author(s)

    Research areas

  • Employer-to-employer transitions, Labor market flows, Measurement problems, Time aggregation bias

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