WHY ARE ESTABLISHMENTS SO HETEROGENEOUS

Changes in the size of establishments - as opposed to the turnover of workers across a given set of jobs - account for a non-negligible comp onent of gross workers flows. Based on a rich database of establishmen t-level employment records in western Germany, this paper analyses the magnitude and determinants of job turnover and its relation with labo ur turnover. Consistently with findings from other countries, it is sh own that job turnover is mainly the byproduct of the dispersion of est ablishment-level outcomes within any industry rather than of job reall ocation across different sectors. The role played by disturbances to c onsumer preferences over differentiated products is also assessed in a n attempt to shed some light on the determinants of this tremendous he terogeneity of establishment-level employment changes within each indu stry.