The purpose of this grant is for continued support for research on the nature and implications of establishment-level employment and wage dynamics. The various components of this project rely heavily on the use of the Longitudinal Research Database as a rich source of establishment-level data for U.S. manufacturing industries. Three lines of research are pursued in this project. The first uses quarterly and annual time series data, that the investigators have constructed on gross job creation and destruction, to investigate the driving forces behind business cycles. The second line of research involves the development and analysis of public domain time series data on gross investment flows, by detailed sector and plant characteristic. The third involves the development of theories to investigate the positive and welfare implications of the connection between job creation and destruction and the business cycle. This research is important because it will enhance our understanding of wage and employment changes at the level of the firm, and it will also provide new insights as to how these changes affect and are affected by the business cycle.
