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Employment fluctuations in a dynamic model with long-term and short-term contracts

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  • Matsue, Toyoki

Abstract

Fluctuations in employment are one of the central issues in the labor market literature and have been investigated in a number of empirical and theoretical studies. This study presents a dynamic framework that can analyze the economy in which long-term and short-term contracts coexist. The particular differences between long-term and short-term contracts are stickiness of employment adjustments and explicit employment duration. The simulation results show that the large short-term employment ratio and the high quit rate lead to the high variations in employment. Moreover, they indicate that the large adjustment cost and the long employment duration bring about decreased employment fluctuations.

Suggested Citation

  • Matsue, Toyoki, 2019. "Employment fluctuations in a dynamic model with long-term and short-term contracts," MPRA Paper 97545, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:97545
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    1. Matsue, Toyoki, 2020. "The impact of short-term employment contracts on employment volatility and economic fluctuations," MPRA Paper 102731, University Library of Munich, Germany.

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    More about this item

    Keywords

    employment dynamics; dynamic labor demand; labor market institutions; adjustment cost; employment duration;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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