Technology Shocks and the Labor-Input Response: Evidence from Firm-Level Data
AbstractWe study the relationship between technology shocks and labor input on Swedish firm-level data using a production function approach to identify technology shocks. Taking standard steps yields a contractionary contemporaneous labor-input response in line with previous studies. This finding may, however, be driven by measurement errors in the labor-input variable. Relying on a unique feature of our data set, which contains two independently measured firm-specific labor input measures, we can evaluate the potential bias. We do not find any evidence supporting that this bias would conceal any true positive contemporaneous effect. The results thus point away from standard flexible-price models and towards models emphasizing firm-level rigidities.
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Bibliographic InfoPaper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 198.
Length: 26 pages
Date of creation: 01 May 2006
Date of revision:
Technology Shocks; Labor Input; Business Fluctuations; Micro Data;
Other versions of this item:
- Mikael Carlsson & Jon Smedsaas, 2007. "Technology Shocks and the Labor-Input Response: Evidence from Firm-Level Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(6), pages 1509-1520, 09.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-27 (All new papers)
- NEP-CBA-2006-05-27 (Central Banking)
- NEP-DGE-2006-05-27 (Dynamic General Equilibrium)
- NEP-MAC-2006-05-27 (Macroeconomics)
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