Are Adjustment Costs for Labor Asymmetric? An Econometric Test on Panel Data for Italy
In this paper we analyze the structure of adjustment costs for labor. In particular, the question whether hiring and firing costs are asymmetric is addressed. We maintain the standard assumption of quadratic adjustment costs, but allow the multiplicative coefficient to differ for the firing and hiring regime. The Euler equations for this problem can be combined into a general model that nests the one with symmetric adjustment costs. The model can be conveniently estimated and the parameter restrictions implied by symmetry easily tested. We also extend the model to allow for variable adjustment coefficients. In the empirical application we use a panel data collected by Ceris on 52 large Italian firms for the period 1958-1988. The general conclusion from the econometric testing is that the hypothesis of symmetric adjustment costs is rejected by the data. Copyright 1993 by MIT Press.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||Sep 1991|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.bu.edu/econ/isp/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:bostin:0021. 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: (Thomas Krichel)
If references are entirely missing, you can add them using this form.