Abstract
This paper studies the dynamics of labor demand at the plant level to quantify labor adjustment costs. At the plant level, in contrast to time-series observations, the correlation of hours and employment growth is negative while hours and employment growth are about equally volatile. We specify and estimate the parameters of a plant-level dynamic optimization problem using simulated method of moments to match these plant-level observations. Our findings indicate that non-convex adjustment costs are critical for explaining plant-level observations on hours and employment adjustment.
Original language | English (US) |
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Pages (from-to) | 37-50 |
Number of pages | 14 |
Journal | Research in Economics |
Volume | 69 |
Issue number | 1 |
DOIs | |
State | Published - Mar 1 2015 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics