Heterogeneity in the cyclical sensitivity of job-to-job flows

Scarce empirical evidence exists for Germany regarding the cyclical aspects of worker reallocation. Furthermore, it is assumed that the cyclical influence on transition rates is the same for all demographic groups. However, one can expect that each subgroup is differentially influenced by the same cycle. Therefore, we emphasize the heterogeneity of cyclical influences for different subgroups of workers, defined by age, gender and skills, and focus on job-to-job transitions which are, in fact, found to be the largest flows in the German labor market. The findings suggest that job-to-job transitions are procyclical. The empirical framework employed here allows demographic groups to vary in their cyclical sensitivity. Female and unskilled workers experience more pronounced swings than the core group of medium-skilled, medium-aged men. By contrast, the job-to-job transition rates of high-skilled workers, old workers, as well as young workers are less influenced by cyclical behavior.