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Employment Dynamics and the Structure of Labor Adjustment Costs

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  • Pedro Portugal
  • José Varejão

Abstract

In this paper we discuss the structure of labor adjustment costs in relationship to the dynamics of job and worker flows. Using high frequency data, we document a previously unsuspected degree of lumpiness in employment adjustment, which is characteristic of non-convex adjustment costs. By means of the statistical analysis of duration data, we relate that lumpiness to the structure of adjustment costs and not to the structure of shocks.

Suggested Citation

  • Pedro Portugal & José Varejão, 2003. "Employment Dynamics and the Structure of Labor Adjustment Costs," Working Papers w200312, Banco de Portugal, Economics and Research Department.
  • Handle: RePEc:ptu:wpaper:w200312
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    References listed on IDEAS

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    1. John M. Abowd & Patrick Corbel & Francis Kramarz, 1999. "The Entry And Exit Of Workers And The Growth Of Employment: An Analysis Of French Establishments," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 170-187, May.
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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