Plant Turnover and Gross Employment Flows in the U.S. Manufacturing Sector

Abstract

This article quantifies the role of plant construction, expansion, contraction, and closing in generating net and gross changes in U.S. manufacturing employment over the 1963-82 period. A new longitudinal data set, constructed from the plant-level observations collected in the last five Census of Manufactures, is utilized. The reallocation of employment opportunities across and within sectoral, regional, and cohort boundaries is measured. Over 70% of the turnover in employment opportunities occurs across plants within the same two-digit industry and geographic region. Systematic differences in the employment fluctuations of plants of different ages are also found.