Comparison of U.S. and international labor turnover statistics

Overview of labor demand data at BLS

Since 1999, the Job Openings and Labor Turnover Survey (JOLTS) of the U.S. Bureau of Labor Statistics (BLS) has produced job openings and labor turnover data in order to assess the unmet demand for workers in the labor market. The JOLTS program measures job openings, hires, and separations on a monthly basis by industry and geographic region.⁶

Eurostat defines job vacancies as follows:

A paid post that is newly created, unoccupied, or about to become vacant: (a) for which the employer is taking active steps and is prepared to take further steps to find a suitable candidate from outside the enterprise concerned; and (b) which the employer intends to fill either immediately or within a specific period of time. A vacant post that is only open to internal candidates is not treated as a 'job vacancy'. The job vacancy rate (JVR) measures the proportion of total posts that are vacant, according to the definition of job vacancy above, expressed as a percentage of the number of job vacancies divided by the sum of the number of occupied posts plus the number of job vacancies all multiplied by 100.⁷

Eurostat provides job vacancy data on a quarterly and annual basis.

The majority of EU countries provide job vacancy statistics to Eurostat and make that data available on their individual statistical agencies’ websites. France and Sweden produce alternative statistics.

The National Institute of Statistics and Economic Studies (INSEE) of France produces a statistic called registered job vacancies. Registered job vacancies are described as follows:

Total job vacancies registered over a given period (year, month) are the permanent (more than 6 months), temporary (1 to 6 months) or casual (less than 1 month) job vacancies filed by employers in local employment agencies in the course of the year. The statistics on job vacancies registered in the course of a given period (month, year) are compiled by the statistics department of the Ministry for Labour, drawn from all the vacancies filed with Pôle Emploi.⁸

Statistics Sweden produces data on job openings and provides that data to Eurostat. It also produces job vacancy statistics. The survey description and definitions read as follows:

The Job Vacancy Survey is an enterprise-based survey covering both the public and the private sector. The purpose of the survey is to contribute information about the labour demand. The results are published quarterly. The number of job openings follows Eurostat’s definition of vacancies. Unmet demand is measured by vacancies, defined as unoccupied job openings to be filled immediately.⁹

Hires and separations data

A number of countries produce hires data and separations data. These countries include Estonia, Japan, New Zealand, the Philippines, Singapore, and the United States. Table 2 shows the definitions used by these countries.

Japan’s Ministry of Health, Labour and Welfare calculates accession rates and separation rates, by industry, using data collected via the Monthly Labour Survey. According to the Ministry survey description, the aim of the survey is “to clarify changes in employment, earnings and hours worked, on both national and a prefectural level.”¹⁰

Since 1999, Statistics New Zealand has produced quarterly data detailing the worker turnover rate. The rate, a measure of workforce stability, is defined as “the ratio of the average of the total accessions and separations to the average of the total jobs in the reference quarter (t) and the previous quarter (t−1).”¹¹

Analysis of job openings and labor demand data

Labor demand data complement other data sources, particularly labor supply data, and help data users examine factors that influence a nation’s economy. These data, when available, are used to examine labor force churn, labor demand and supply, business cycles, and industry and geographic economic conditions.

According to the International Monetary Fund (IMF), a global recession can be defined as “a contraction in world real per capita GDP accompanied by a broad decline in various other measures of global economic activity.”¹² There have been four global recessions in the last 50 years with the most recent being the year-long 2009 global recession.¹³ While the number of job openings, hires, and separations decreased during the 2009 global recession, labor demand and labor market churn continued. Using time series that encompass the most recent global recession, the following figures examine labor demand data from several countries.

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Figure 1 compares the euro area quarterly vacancy rate with the JOLTS job openings rate (adjusted on a quarterly basis) before and after the 2009 global recession. Note that while the global recession covers the four quarters of 2009, the economies of the euro area countries and the United States experienced recessions with differing quarterly periods. According to the Center for Economic and Policy Research, Euro Area Business Cycle Dating Committee, the euro area recession began in the first quarter of 2008 and ended in the second quarter of 2009.¹⁴ The United States experienced a recession from December 2007 through June 2009 as determined by the National Bureau of Economic Research, which would be reflected in the quarterly data from the fourth quarter of 2007 through the second quarter of 2009.¹⁵

The job openings and job vacancy rates for both the United States and the euro area series began to decline prior to the start of the 2009 global recession and started to recover at the end of 2009. In the fourth quarter of 2009, euro area and U.S. rates reached lows of 1.3 percent and 1.7 percent, respectively.

Job openings, representing labor demand, is a complementary statistic to unemployment, which represents labor supply. As a labor market contracts, workers experience job loss and can have a difficult time finding a new job. Job availability declines because many establishments are forced to slow or freeze hiring, while others go out of business. In order to remain in business, many establishments cease hiring and implement layoffs and discharges to decrease the number of employees on their payrolls and control costs. Thus, the number of available job openings decreases and the number of people looking for a job may increase. As the labor market expands, job availability can increase and the number of people looking for a job may decline.

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Figure 2 shows the ratio of the number of unemployed to the number of job openings (vacancies) in the United States and Germany. A high ratio indicates that more people are competing for the same job. Note that, in both countries, this ratio was much higher during the 2009 global recession. In July 2009, U.S. and German ratios peaked, at 6.8 and 12.5, respectively.

Job openings and unemployment have an inverse relationship, which is represented by the Beveridge curve. The Beveridge curve plots the job openings rate with respect to the unemployment rate over time. The curve can be used to identify forces of change in the labor market. Demand-related expansions and contractions show movement along the curve, indicating changes related to the business cycle. During an economic expansion, job openings are high and unemployment is low; during an economic contraction, job openings are low and unemployment is high. Other types of changes in the labor market can shift the curve toward or away from the axis. A shift in the curve can indicate structural change, a change in labor force participation, or various other changes.

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Figure 3 shows the U.S. Beveridge curve with data reflecting the impact of recessionary periods from March 2001 to November 2001 and December 2007 through June 2009.

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Figure 4 shows the U.K. Beveridge curve with data reflecting the recession from the third quarter of 2008 through the third quarter of 2009.¹⁶

Hires are procyclical. During an expansion, establishments replace workers that separate and possibly increase the number of employees through hires. During a contraction, establishments may delay replacing employees that separate.

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Figure 5 compares the hires, accessions and engaged employees rates of the United States (adjusted to a quarterly basis), New Zealand, and Estonia. While the global recession covers all four quarters of 2009, these countries separately experienced recessions with differing quarterly periods.

JOLTS separations data comprise quits, layoffs and discharges, and other separations. Of these components, quits are considered procyclical since workers generally quit more during economic expansions (when more jobs are available) and quit less during economic contractions (when fewer jobs are available). Layoffs and discharges, on the other hand, are considered countercyclical. Establishments retain workers during expansions and lay off workers during contractions.

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Figure 6 compares the Estonian quarterly left employees rates, the New Zealand quarterly separations rates, and the United States separations rates adjusted to a quarterly basis. The data trended downward before the 2009 global recession, as individual countries experienced their respective recessions.

There are currently many countries that produce job openings (vacancies) data and fewer that produce hires (accessions) and separations data. Various methodologies and definitions exist to capture these data. Different levels of data detail are published, ranging from national totals to detailed break downs by industry, region, occupation, and size class. Labor demand data tell users the underlying story of employment growth and decline, both in the United States and abroad. Although the definitions of various data elements differ across countries, the data generally show similar trends over the time period examined in this article. Labor demand data are increasingly useful for gauging the overall health of the economy and for making informed decisions about economic policy.

ACKNOWLEDGMENT: Any opinions expressed in this article are those of the author and do not constitute policy of the U.S. Bureau of Labor Statistics.