On The Sources And Size Of Employment Adjustment Costs
Micro employment adjustment costs affect not only establishment-level dynamics but can also affect aggregate employment dynamics. The difficulties in directly observing and measuring these adjustment costs necessitate an indirect approach in order to learn more about the sources and size of these costs. This paper examines differences in employment adjustments by worker and establishment characteristics using micro-level data for approximately 11,000 U.S. manufacturing plants. Differences in the speed of adjustment within the organizing framework of the traditional partial adjustment model are used to identify the source and size of employment adjustment costs. The estimates are undertaken using three different techniques and under a variety of assumptions concerning market structure, worker heterogeneity, and degree of interrelation of inputs. The estimates show that employment adjustment speeds differ over worker and establishment characteristics in a manner that is consistent with the underlying adjustment cost stories. These differences suggest that systematic changes in the distribution of establishments over these characteristics can influence aggregate employment dynamics in response to a shock through compositional effects.
|Date of creation:||May 1999|
|Contact details of provider:|| Postal: 4600 Silver Hill Road, Washington, DC 20233|
Phone: (301) 763-6460
Fax: (301) 763-5935
Web page: http://www.census.gov/ces
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
- Ricardo J. Caballero & Eduardo M. R. A. Engel, 1993.
"Microeconomic Adjustment Hazards and Aggregate Dynamics,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 108(2), pages 359-383.
- Ricardo J. Caballero & Eduardo M.R.A. Engel, 1992. "Microeconomic Adjustment Hazards and Aggregate Dynamics," NBER Working Papers 4090, National Bureau of Economic Research, Inc.
- Katharine G. Abraham & Susan N. Houseman, 1993. "Job Security and Work Force Adjustment: How Different are U.S. and Japanese Practices?," Book chapters authored by Upjohn Institute researchers,in: Christopher F. Buechtemann (ed.), Employment Security and Labor Market Behavior: Interdisciplinary Approaches and International Evidence, pages 180-199 W.E. Upjohn Institute for Employment Research.
- Abraham, Katharine G. & Houseman, Susan N., 1989. "Job security and work force adjustment: How different are U.S. and Japanese practices?," Journal of the Japanese and International Economies, Elsevier, vol. 3(4), pages 500-521, December.
- Katharine G. Abraham & Susan N. Houseman, 1992. "Job Security and Work Force Adjustment: How Different are U.S. and Japanese Practices?," Book chapters authored by Upjohn Institute researchers,in: Giorgio Galeazzi & Daniel Hamermesh (ed.), Dynamic Labor Demand and Adjustment Costs, pages 280-301 W.E. Upjohn Institute for Employment Research.
- Katharine G. Abraham & Susan N. Houseman, "undated". "Job Security and Work Force adjustment: How Different are U.S. and Japanese Practices?," Upjohn Working Papers and Journal Articles kgasnh1989, W.E. Upjohn Institute for Employment Research.
- Katharine G. Abraham & Susan N. Houseman, 1989. "Job Security and Work Force Adjustment: How Different are U.S. and Japanese Practices?," NBER Working Papers 3155, National Bureau of Economic Research, Inc.
- Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
- James D Adams & Adam B Jaffe, 1994. "The Span of the Effect of R&D in the Firm and Industry," Working Papers 94-7, Center for Economic Studies, U.S. Census Bureau.
- Bergstrom, Villy & Panas, Epaminondas E, 1992. "How Robust Is the Capital-Skill Complementarity Hypothesis?," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 540-546, August.
- Bresson, G & Kramarz, F & Sevestre, P, 1992. "Heterogeneous Labor and the Dynamics of Aggregate Labor Demand: Some Estimations Using Panel Data," Empirical Economics, Springer, vol. 17(1), pages 153-168.
- Caballero, Ricardo J & Engel, Eduardo M R A & Haltiwanger, John, 1997. "Aggregate Employment Dynamics: Building from Microeconomic Evidence," American Economic Review, American Economic Association, vol. 87(1), pages 115-137, March.
- Ricardo J. Caballero & Eduardo M.R.A. Engel & John Haltiwanger, 1995. "Aggregate Employment Dynamics: Building From Microeconomic Evidence," NBER Working Papers 5042, National Bureau of Economic Research, Inc.
- Ricardo J. Caballero & Eduardo Engel & John Haltiwanger, 1996. "Aggregate Employment Dynamics: Building from Microeconomic Evidence," Documentos de Trabajo 6, Centro de Economía Aplicada, Universidad de Chile.
- Beggs, John J. & Nerlove, Marc, 1988. "Biases in dynamic models with fixed effects," Economics Letters, Elsevier, vol. 26(1), pages 29-31.
- Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 47-82, January. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:99-7. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Erica Coates)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.