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Dynamics of labor demand: Evidence from plant-level observations and aggregate implications

Russell Cooper, John Haltiwanger and Jonathan Willis ()

Research in Economics, 2015, vol. 69, issue 1, 37-50

Abstract: This paper studies the dynamics of labor demand at the plant level to quantify labor adjustment costs. At the plant level, in contrast to time-series observations, the correlation of hours and employment growth is negative while hours and employment growth are about equally volatile. We specify and estimate the parameters of a plant-level dynamic optimization problem using simulated method of moments to match these plant-level observations. Our findings indicate that non-convex adjustment costs are critical for explaining plant-level observations on hours and employment adjustment.

Keywords: Labor dynamics; Adjustment costs; Firm-level data (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: Dynamics of Labor Demand: Evidence from Plant-level Observations and Aggregate Implications (2004) Downloads
Working Paper: Dynamics of labor demand: evidence from plant-level observations and aggregate implications (2003) Downloads
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