Aggregate Employment Dynamcis and Lumpy Adjustment Costs
AbstractThis study examines what one can infer from aggregate time-series of employment under the assumption that adjustment at the micro level is discrete because of lumpy adjustment costs. The research uses various sets of quarterly and monthly data for the United States and imposes assumptions about how sectoral dispersion in output shocks affects adjustment through aggregation. I find no consistent evidence of any effect of sectoral shocks on the path of aggregate employment. I generate artificial aggregate time series from microeconomic processes in which firms adjust employment discretely. They produce the same inferences as the actual data. Standard methods of estimating equations describing the time path of aggregate employment yield inferences about differences in the size of adjustment costs that are incorrect and inconsistent with the true differences at the micro level. This simulation suggests that the large literature on employment dynamics based on industry or macro data cannot inform us about the size of adjustment costs, and that such data cannot yield useful information on variations in adjustment costs over time or among countries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3229.
Date of creation: Mar 1991
Date of revision:
Note: LS EFG
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Hamermesh, Daniel S., 1990. "Aggregate employment dynamics and lumpy adjustment costs," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 33(1), pages 93-129, January.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Varejão, José & Portugal, Pedro, 2007.
"Spatial and Temporal Aggregation in the Estimation of Labor Demand Functions,"
IZA Discussion Papers
2701, Institute for the Study of Labor (IZA).
- José Varejão & Pedro Portugal, 2007. "Spatial and Temporal Aggregation in the Estimation of Labor Demand Functions," Working Papers w200704, Banco de Portugal, Economics and Research Department.
- Robert G. King & Julia K. Thomas, 2006.
"Partial Adjustment Without Apology,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 779-809, 08.
- Robert G. King & Julia K. Thomas, 2005. "Partial Adjustment without Apology," Boston University - Department of Economics - Macroeconomics Working Papers Series WP2005-001, Boston University - Department of Economics.
- Robert G. King & Julia K. Thomas, . "Partial Adjustment without Apology," GSIA Working Papers 1999-E12, Carnegie Mellon University, Tepper School of Business.
- Robert G. King & Julia K. Thomas, 2003. "Partial Adjustment without Apology," NBER Working Papers 9946, National Bureau of Economic Research, Inc.
- Robert G. King & Julia K. Thomas, 2004. "Partial Adjustment Without Apology," Working Papers 2004/15, Turkish Economic Association.
- Robert G. King & Julia K. Thomas, 2004. "Partial adjustment without apology," Staff Report 327, Federal Reserve Bank of Minneapolis.
- Mulligan Casey B, 2001.
"Aggregate Implications of Indivisible Labor,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 1(1), pages 1-35, April.
- Casey B. Mulligan, 1998.
"Microfoundations and macro implications of indivisible labor,"
Discussion Paper / Institute for Empirical Macroeconomics
126, Federal Reserve Bank of Minneapolis.
- Casey B. Mulligan, 1999. "Microfoundations and Macro Implications of Indivisible Labor," NBER Working Papers 7116, National Bureau of Economic Research, Inc.
- Kölling, Arnd & Schnabel, Claus & Wagner, Joachim, 2001. "Bremst das Schwerbehindertengesetz die Arbeitsplatzdynamik in Kleinbetrieben?," Discussion Papers 4, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
- Daniel S. Hamermesh, 1990.
"A Genral Model of Dynamic Labor Demand,"
NBER Working Papers
3356, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.