Identifying Adjustment Costs of Net and Gross Employment Changes
Joao Ejarque () and
Øivind Nilsen ()
Additional contact information
Joao Ejarque: University of Essex
No 3703, IZA Discussion Papers from Institute of Labor Economics (IZA)
A relatively unexplored question in dynamic labour demand regards the source of adjustment costs, whether they depend on net or gross changes in employment. We estimate a structural model of dynamic labour demand where the firm faces adjustment costs related to gross and net changes in its workforce. We focus on matching quarterly moments of hiring and of net changes in employment from a panel of establishments. The main component of adjustment costs in our panel is quadratic adjustment costs to gross changes in employment. We also estimate that adjustment costs have a large economic cost, roughly cutting the value of our establishments in half.
Keywords: employment; adjustment costs; establishment level data; structural estimation (search for similar items in EconPapers)
JEL-codes: C33 C41 E24 J23 (search for similar items in EconPapers)
Pages: 40 pages
New Economics Papers: this item is included in nep-bec, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
Working Paper: Identifying Adjustment Costs of Net and Gross Employment Changes (2008)
Working Paper: Identifying Adjustment Costs of Net and Gross Employment Changes (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp3703
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().