Excess Labor and the Business Cycle
NBER Working Paper No. 1292
This paper compares the Medoff-Fay estimates of labor hoarding during troughs, which are based on data from manufacturing plants, with aggregate estimates of excess labor on hand.The two sets of estimates seem consistent, which provides a strong argument in favor of the excess labor hypothesis. This is one of the few examples in macroeconomics where a hypothesis has been so strongly confirmed using detailed micro data.
Published: Fair, Ray C. "Excess Labor and the Business Cycle." American Economic Review, Vol. 75, No. 1, (March 1985), pp.239-245.