Worker turnover and job reallocation in Taiwanese manufacturing

Abstract

The paper examines time-series patterns of job and worker flows in a newly industrializing economy (NIE). Using plant-level data from the Taiwan manufacturing sector, the cyclical behaviour of job reallocation and its relation with worker turnover is analysed. It is found that job reallocation and labour turnover are procyclical, at both the aggregate and (two-digit) industry levels. The share of worker turnover caused by gross job reallocation is 17%, suggesting the majority of observed worker turnover reflects rotations of positions that are neither created or destroyed. There is substantial heterogeneity in plant-specific job and worker turnover patterns. Job creation and job destruction rates are higher among small plants and private-sector plants. The private plants are more dynamic than public plants in terms of worker turnover. Controlling for year and industry effects, it is found that job creation and worker turnover are both higher in export-oriented industries.