Weathering the Great Recession: Variation in Employment Responses by Establishments and Countries

Erling Barth, James Davis, Richard Freeman and Sari Pekkala Kerr

No 22432, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper finds that US employment changed differently relative to output in the Great Recession and recovery than in most other advanced countries or in the US in earlier recessions. Instead of hoarding labor, US firms reduced employment proportionately more than output in the Great Recession, with establishments that survived the downturn contracting jobs massively. Diverging from the aggregate pattern, US manufacturers reduced employment less than output while the elasticity of employment to gross output varied widely among establishments. In the recovery, growth of employment was dominated by job creation in new establishments. The variegated responses of employment to output challenges extant models of how enterprises adjust employment over the business cycle.

JEL-codes: J0 J00 J01 J08 J10 J24 J60 J64 J70 J80 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-lab and nep-ltv
Note: EFG LS
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Citations: View citations in EconPapers (1)

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Working Paper: Weathering the Great Recession: Variation in Employment Responses by Establishments and Countries (2016)
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