Firm-Level Shocks and Labor Flows
This paper analyzes how labor ows respond to permanent idiosyncratic shifts in rm-level production functions and demand curves using very detailed Swedish micro data. Shocks to rms physical productivity have only modest eects on rm-level employment decisions. In contrast, the paper documents rapid and substantial employment adjustments through hires and separations in response to rm-level demand shocks. The choice of adjustment margin depends on the sign of the shock: rms adjust through increased hires if these shocks are positive and through increased separations if the shocks are negative.
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| Language: | English |
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Inter-American Development Bank
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| Subjects: | Productivity, Manufacturing Industry, Labor Market, Demand Shock, Employee Selection, J63 - Turnover • Vacancies • Layoffs, D22 - Firm Behavior: Empirical Analysis, J23 - Labor Demand, technology;Demand;Job flows;Worker flows, |
| Online Access: | http://dx.doi.org/10.18235/0003002 https://publications.iadb.org/en/firm-level-shocks-and-labor-flows |
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