Higher profit margins have helped firms hoard labour

Vasco Botelho

Economic Bulletin Boxes, 2024, vol. 4

Abstract: Why are there more firms able to hoard labour than before the pandemic? Firm-level estimates suggest that a 1 percentage point increase in the profit margin of a firm raises the likelihood of that firm hoarding labour by 0.2 percentage points. This suggests that the higher profit margins of firms in recent years have, on average, improved their ability to hoard labour when their own economic outlook has worsened. As a result, a tightening of profit margins may have implications for employment growth. JEL Classification: E24, J23

Keywords: Labour hoarding; Labour market; Profit margins; SAFE (search for similar items in EconPapers)
Date: 2024-06
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