Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35088
Authors: 
Ejarque, João Miguel
Nilsen, Øivind Anti
Year of Publication: 
2008
Series/Report no.: 
IZA discussion papers 3703
Abstract: 
A relatively unexplored question in dynamic labour demand regards the source of adjustment costs, whether they depend on net or gross changes in employment. We estimate a structural model of dynamic labour demand where the firm faces adjustment costs related to gross and net changes in its workforce. We focus on matching quarterly moments of hiring and of net changes in employment from a panel of establishments. The main component of adjustment costs in our panel is quadratic adjustment costs to gross changes in employment. We also estimate that adjustment costs have a large economic cost, roughly cutting the value of our establishments in half.
Subjects: 
Employment
adjustment costs
establishment level data
structural estimation
JEL: 
C33
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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