Skip navigation
Please use this identifier to cite or link to this item:
Title: Linear Adjustment Costs and Seasonal Labor Demand: Unemployment Insurance Experience Rating in Retail Trade
Authors: Anderson, Patricia
Keywords: employment variability
insurance experience rateability
labor demand
adjustment costs
Issue Date: 1-Jan-1992
Citation: Quarterly Journal of Economics, Vol. 108, No. 4, November 1993
Series/Report no.: Working Papers (Princeton University. Industrial Relations Section) ; 293
Abstract: Standard models of dynamic labor demand rely on the presence of adjustment costs to explain the observed smoothness in employment patterns, although the costs are often difficult to quantify. The experience rating feature of the U.S. Unemployment Insurance (UI) system provides a measurable linear cost of adjustment. Using a unique data set with administrative data on over 8,000 firms, I estimate the effect of a UI-induced linear adjustment cost on seasonal labor demand in retail trade. I find strong support for the large role of adjustment costs in reducing the employment response of firms to seasonal fluctuations in demand.
Related resource:
Appears in Collections:IRS Working Papers

Files in This Item:
File Description SizeFormat 
293.pdf2.17 MBAdobe PDFView/Download

Items in Dataspace are protected by copyright, with all rights reserved, unless otherwise indicated.