When you work as a researcher at a large university, you’ve got plenty of company.  I may not fully appreciate every nuance of the specialized work being done by the broad spectrum of professors and scientists that I work with, but all of us share a common understanding of the research process, and what it takes to be successful at it.  We slave over datasets, keep an ever alert eye for funding and support, and try to get others interested and excited over our findings and conclusions at conferences and in written reports.

But when researchers step outside the ivy-covered halls of academia, they frequently face a different kind of audience.   It’s not just skepticism with research results – refusing to believe findings that aren’t convincingly demonstrated – that is the issue.  Rather it is skepticism with the entire process of research that produces resistance, or even full scale counter-attack.  Results are lampooned as esoteric, obvious, or worst of all, propaganda.

Fortunately – or perhaps not, depending on your point of view – research continues unabated, discussed among researchers themselves, and accumulating on library shelves and web servers around the globe.  And every now and then a small piece of that research comes along that creates a product or helps solves a riddle in the real world that makes the case for its ultimate value better than any mere words can do.

In economics research, we’re not inventing cold fusion – or even the cure for the common cold, for that matter.  But we are trying to understand how and why economic events unfold around us the way they do, with an eye towards making them turn out better.  And even some of the most basic research on the economy, such as recording, tabulating, and tracking jobs, reveals some surprisingly deep insights.

As those of us in the forecasting business travel around the state to deliver our prognostications for the state’s economic future, we are frequently met with a simple, yet puzzling, question.  How can it be said that Indiana employment totals are not keeping up with the pace of job growth elsewhere, when the news is full of  reports of expansions and ground-breakings by new and existing companies?

A project launched by the U.S. Bureau of Labor Statistics to create a dataset that allows us to better track the flows of people in and out of the labor force, as well as from job to job, tells us part of the answer.  One of the most stunning insights of what is called employment dynamics research is the revelation of just how turbulent a place the U.S. labor market is.

For example, in the final three months of 2004 the U.S. economy created about 869,000 net new jobs.  Job growth data have been collected and monitored by economists and policymakers for decades, and comprise one of our most basic indicators of economic performance.

But what about the job churn?  Through better linking of datasets and tracking of individual wage records we now know that those 869,000 new jobs came about as a result of 8.1 million jobs being added, at the same time as another 7.2 million jobs were vacated or destroyed.  And there was nothing unusual about those three months.  Employment dynamics data tell us that the job creation and destruction that ultimately grows payrolls economy-wide occurs throughout the year, in both good economic times and bad, at a pace that dwarfs net job creation.

The image of the Indiana economy that is conjured up by this research is not one of a solid building, rising from the ground brick by brick.  It’s a bit more like a boiling cauldron, shifting and mixing before our eyes.  Changes elsewhere in the economy that escape notice can easily offset – or add to – individual stories of job growth making headlines.  And we can thank a researcher somewhere for figuring that out.