Dynamic employment adjustments over business cycles

Tung Liu () and Lee Spector

No 200302, Working Papers from Ball State University, Department of Economics

Abstract: This paper uses U.S. monthly industrial production employment data between 1964 and 2000 to examine the dynamic labor adjustments of production workers and nonproduction workers in both the short and longrun. The results from the short-run analysis show that the dynamic adjustment of production workers is consistent with business cycles. However, the adjustment of nonproduction workers is relatively fixed, lags behind the shocks over business cycle changes, and exhibits the quasi-fixed factor property. In the long-run, we found that nonproduction workers and production workers are cointegrated indicating that the two series are in long-run equilibrium.

Keywords: Employment adjustment; business cycles; quasi-fixed labor (search for similar items in EconPapers)
JEL-codes: C32 J21 J50 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2003-12, Revised 2005-01
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

Published in Empircal Economics, 2005, vol. 30, no. 1, pp. 151-169

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http://econfac.bsu.edu/research/workingpapers/bsuecwp200302liu.pdf First version, 2003 (application/pdf)

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Journal Article: Dynamic employment adjustments over business cycles (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:bsu:wpaper:200302

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