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Dynamic employment adjustments over business cycles

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Author Info
Tung Liu () (Department of Economics, Ball State University)
Lee C. Spector () (Department of Economics, Ball State University)

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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.

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File URL: http://web.bsu.edu/cob/econ/research/papers/bsuecwp200302liu.pdf
File Format: application/pdf
File Function: First version, 2003
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Publisher Info
Paper provided by Ball State University, Department of Economics in its series Working Papers with number 200302.

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Length: 19 pages
Date of creation: Dec 2003
Date of revision: Jan 2005
Publication status: Published in Empircal Economics 30 no. 1 (2005): 151-169
Handle: RePEc:bsu:wpaper:200302

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Related research
Keywords: Employment adjustment; business cycles; quasi-fixed labor;

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Find related papers by JEL classification:
C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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References listed on IDEAS
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