Scandinavian Working Papers in Economics
Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy
No 2014:28: Firm-level shocks and labor adjustments
Mikael Carlsson (), Julián Messina () and Oskar Nordström Skans ()
Additional contact information
Mikael Carlsson: Department of Economics, Uppsala University, Postal: P O Box 513, SE-751 20 Uppsala, Sweden
Julián Messina: World Bank
Oskar Nordström Skans: Departement of Economics, Uppsala University, Postal: P O Box 513, SE-751 20 Uppsala, Sweden
Abstract: We analyze how firms adjust their labor in response to idiosyncratic shifts in their production function and demand curves using a unique data-set of Swedish manufacturing firms. We show that permanent shocks to firm-level demand is a main driving force behind both job and worker reallocation. In contrast, shocks to physical productivity and temporary demand shocks have a very limited impact on firm-level employment despite being important determinants of other firm-level fundamentals. We also present evidence suggesting that the adjustment to permanent demand shocks is fairly unconstrained. Most notably, firms primarly downsize through increased separations of both short- and long-tenured workers even when they could have adjusted their employment through reduced hires.
Keywords: Technology; demand; job creation; rigidities; worker flows
59 pages, December 9, 2014
Full text files
wp2014-28-Firm-level...abor-adjustments.pdf
- IFAU - Institute for Evaluation of Labour Market and Education Policy
- Ordering Working Papers
- Home page for this series
Questions (including download problems) about the papers in this series should be directed to Ali Ghooloo ()
Report other problems with accessing this service to Sune Karlsson ().
RePEc:hhs:ifauwp:2014_028This page generated on 2024-09-13 22:15:20.