 Labor market institutions and technology-induced labor adjustment along the extensive and intensive marginsJournal of Macroeconomics, 2024, vol. 79, issue C Abstract: What is the composition of total hours response to a technology shock in countries with different labor market institutions in terms of extensive and intensive margin movements? To answer this question, I identify technology shocks using structural vector autoregressions (SVARs) and decompose the responses of hours into adjustments along the extensive and intensive margins. I compare the adjustments along the two margins between groups of countries with strict and flexible labor market institutions. I find that both margins play a large role in accommodating technology shocks, with adjustments along the intensive margin being more important. Furthermore, countries with flexible labor market institutions display a larger drop in employment, whereas the results for the intensive margin are mixed. Finally, the cross-country differences in fluctuations along the two margins can be linked to the strictness of institutions that target quantity and price adjustments in the labor market. Keywords: Technology shocks; Labor market institutions; Business cycle fluctuations; Structural identification (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:79:y:2024:i:c:s016407042300071x DOI: 10.1016/j.jmacro.2023.103571 Access Statistics for this article Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos More articles in Journal of Macroeconomics from Elsevier |
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