The Estimation of Asymmetric Adjustment Costs for the Number of Workers and Working Hours |Empirical Evidence from Japanese Industry Data

Kenji Azetsu () and Mototsugu Fukushige ()
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Kenji Azetsu: Graduate School of Economics, Kobe University

No 05-18, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: In this paper, we investigate the asymmetry of adjustment costs for labour. Using monthly data on Japanese industries, we estimate a model of dynamic labour demand that incorporates adjustment costs for hiring and firing workers, and for changing working hours. Our estimates suggest the following. (1) It is more costly to fire workers than to hire them in all industries. (2) This asymmetry between hiring and firing costs is more important for production sectors than for non-production sectors. (3) It is much less costly to adjust working hours than to adjust the number of workers.

Keywords: Adjustment costs; Dynamic labour demand; Working hours (search for similar items in EconPapers)
JEL-codes: J23 J32 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2005-06
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Citations: View citations in EconPapers (2)

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