Information about this author at RePEc
NBER Working Papers and Publications
|September 2014||Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News|
with Cosmin Ilut, Martin Schneider: w20473
Concave hiring rules imply that firms respond more to bad shocks than to good shocks. They provide a unified 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 levels 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.