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Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News

Cosmin Ilut, Matthias Kehrig and Martin Schneider

Journal of Political Economy, 2018, vol. 126, issue 5, 2011 - 2071

Abstract: Concave hiring rules imply that firms respond more to bad shocks than to good shocks. They provide a unified explanation for several seemingly unrelated facts about employment growth in macro- and microdata. In particular, they generate countercyclical movement in both aggregate conditional “macro” volatility and cross-sectional “micro” volatility, as well as negative skewness in the cross section and in the time series at different levels of aggregation. Concave establishment-level responses of employment growth to total factor productivity shocks estimated from census data induce significant skewness, movements in volatility, and amplification of bad aggregate shocks.

Date: 2018
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Related works:
Working Paper: Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News (2017) Downloads
Working Paper: Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News (2017) Downloads
Working Paper: Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News (2015) Downloads
Working Paper: Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News (2014) Downloads
Working Paper: Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News (2014) Downloads
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