Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News
January 2017
Working Paper Number:
CES-17-15
Abstract
Concave hiring rules imply that firms respond more to bad shocks than to good shocks. They provide a united explanation for several seemingly unrelated facts about employment growth in macro and micro data. In particular, they generate countercyclical movement in both aggregate conditional 'macro' volatility and cross-sectional 'micro' volatility as well as negative skewness in the cross section and in the time series at different level of aggregation. Concave establishment level responses of employment growth to TFP shocks estimated from Census data induce significant skewness, movements in volatility and amplification of bad aggregate shocks.
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:
economist,
econometric,
macroeconomic,
quarterly,
aggregate,
employ,
recession,
shift,
employment growth,
trend,
autoregressive,
forecast,
hiring,
econometrician,
employment dynamics,
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Census of Manufactures,
Annual Survey of Manufactures,
Bureau of Labor Statistics,
National Science Foundation,
Total Factor Productivity,
National Bureau of Economic Research,
Bureau of Economic Analysis,
Longitudinal Business Database,
IQR,
Census of Manufacturing Firms,
Generalized Method of Moments,
North American Industry Classification System,
NBER Summer Institute,
International Trade Research Report
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