Employment Behaviour in Slack and Tight Labour Markets

Arbeitspapier

Empirical and theoretical studies suggest that employment behaviour varies with the state of the labour market since hiring and firings costs depend on the availability of labour. Extending earlier empirical work on this subject, we test for state dependence in employment adjustment and in the effects of forcing variables such as indicators of aggregate demand. We also test whether anticipated labour shortage leads to multiple equilibria in (un)employment. In the inquiry, we employ a linear vector equilibrium correction model (VEqCM) and two states Markov switching VEqCMs. The models are based on quarterly data for Norwegian industry employment and aggregate unemployment in the period 1974 96. We find clear evidence of state dependent adjustment and response to changes in forcing variables. Yet equilibrium solutions for the employment and unemployment appear invariant to cyclical and structural changes in the sample.

Object Details

• ISBN: 82-7553-183-7
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2001/7

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions ; Business Fluctuations; Cycles ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Money Supply; Credit; Money Multipliers
• Subject: Markov switching ; adjustment costs ; asymmetric response ; multiple equilibria

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Akram, Q. Farooq ; Nymoen, Ragnar
• Event: Veröffentlichung
• (who): Norges Bank
• (where): Oslo
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/209796
• Last update: 10.03.2025, 11:44 AM CET