TY - JOUR AU - Ilut, Cosmin AU - Kehrig, Matthias AU - Schneider, Martin TI - Slow to Hire, Quick to Fire: Employment Dynamics with Asymmetric Responses to News JF - National Bureau of Economic Research Working Paper Series VL - No. 20473 PY - 2014 Y2 - September 2014 DO - 10.3386/w20473 UR - http://www.nber.org/papers/w20473 L1 - http://www.nber.org/papers/w20473.pdf N1 - Author contact info: Cosmin L. Ilut Department of Economics Duke University 223 Social Sciences Building Box 90097 Durham, NC 27708 Tel: 919/660-1844 E-Mail: cosmin.ilut@duke.edu Matthias Kehrig Department of Economics Duke University 237 Social Sciences, Box 90097 Durham, NC 27708 Tel: 919/660-1901 E-Mail: matthias.kehrig@duke.edu Martin Schneider Department of Economics Stanford University 579 Serra Mall Stanford, CA 94305-6072 Tel: (650) 721 6320 E-Mail: schneidr@stanford.edu AB - 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. ER -