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Intensive and extensive margins of labor adjustment with non-regular employment

Author

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  • Takano, Tetsuaki

Abstract

This study investigates labor adjustments in firms over the business cycle, focusing on intensive and extensive margins, including regular and non-regular employment. I present a set of stylized facts that the intensive margin and job heterogeneity matter for labor adjustments. I develop a search-matching model incorporating these aspects. The propagation effects of TFP shocks on the labor market are qualitatively consistent with empirical findings. Moreover, the model realistically simulates macroeconomic volatility. This volatility is generated by the introduction of the intensive margin, while that of non-regular jobs has little impact on amplifying fluctuations.

Suggested Citation

  • Takano, Tetsuaki, 2025. "Intensive and extensive margins of labor adjustment with non-regular employment," Journal of Macroeconomics, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:jmacro:v:86:y:2025:i:c:s0164070425000400
    DOI: 10.1016/j.jmacro.2025.103704
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    References listed on IDEAS

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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