Dynamics of labor demand: Evidence from plant-level observations and aggregate implications

Russell Cooper, John Haltiwanger, Jonathan L. Willis

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

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 languageEnglish (US)
Pages (from-to)37-50
Number of pages14
JournalResearch in Economics
Volume69
Issue number1
DOIs
StatePublished - Mar 1 2015

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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