 Labour adjustment costs: Estimation of a dynamic discrete choice model using panel data for Greek manufacturing firmsLabour Economics, 2009, vol. 16, issue 5, 521-533 Abstract: In this paper we estimate a dynamic structural model of employment at firm level. Our dataset consists of a balanced panel of 2790 Greek manufacturing firms. The empirical evidence of this dataset stresses three important stylized facts: (a) there are periods in which firms decide not to change their labour input, (b) there are periods of large employment changes (lumpy nature of labour adjustment) and (c) the commonality is employment spikes to be followed by smooth and low employment growth periods. Following Cooper and Haltiwanger [Cooper, R.W. and Haltiwanger, J. "On the Nature of Capital Adjustment Costs", Review of Economic Studies, 2006; 73(3); 611-633], we consider a dynamic discrete choice model of a general specification of adjustment costs including convex, non-convex and "disruption of production" components. We use a method of simulated moments procedure to estimate the structural parameters. Our results indicate considerable fixed costs in the Greek employment adjustment. Keywords: Labour; adjustment; costs; Employment; growth; Dynamic; discrete; choice; model; Structural; estimation; Panel; data; Method; of; simulated; moments (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:labeco:v:16:y:2009:i:5:p:521-533 Access Statistics for this article Labour Economics is currently edited by A. Ichino More articles in Labour Economics from Elsevier |
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