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

Cosmin Ilut, Matthias Kehrig and Martin Schneider

No 6414, CESifo Working Paper Series from CESifo

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 micro data. 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 level of aggregation. Concave establishment level responses of employment growth to TFP shocks estimated from Census data induce significant skewness, movements in volatility and amplification of bad aggregate shocks.

Keywords: business cycles; time varying volatility; asymmetric adjustment; skewness (search for similar items in EconPapers)
JEL-codes: D20 D80 E20 J20 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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