IS JOB TURNOVER COUNTERCYCLICAL

In recent years several models have been developed in an attempt to ex plain countercyclical movements of job turnover, the sum of gross job creation and destruction rates. However, only in the United States is a negative and statistically significant correlation between job turno ver and employment growth actually observed. In the other countries st udied, job turnover is either acyclical or mildly procyclical. Rather than being associated with the greater flexibility of the United State s compared with the Western European labor markets, these asymmetries in the cyclical behavior of gross job flows can be attributed to stati stical artifacts, namely, with the fact that U.S. job turnover statist ics underrepresent the small business sector and with regression to th e mean effects.