A model of labor demand with linear adjustment costs

Samuel Bentolila; Gilles Saint-Paul

doi:10.1016/0927-5371(94)90015-9

A model of labor demand with linear adjustment costs

Samuel Bentolila, Gilles Saint-Paul

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper sets up a discrete-time model to study the effects of firing costs on labor demand by a firm facing linear adjustment costs under serially independent revenue shocks. It is shown that a rise in firing costs reduces the firm's willingness to hire and fire at the margin, and it reduces its average steady-state labor demand when these costs are low, but raises such demand when they are high.

Original language	English (US)
Pages (from-to)	303-326
Number of pages	24
Journal	Labour Economics
Volume	1
Issue number	3-4
DOIs	https://doi.org/10.1016/0927-5371(94)90015-9
State	Published - Sep 1994

Keywords

Labor demand
Linear adjustment costs
Quit rates

ASJC Scopus subject areas

Economics and Econometrics
Organizational Behavior and Human Resource Management

Access to Document

10.1016/0927-5371(94)90015-9

Cite this

@article{a12d9dc40068411db67d80e0d73b41bf,

title = "A model of labor demand with linear adjustment costs",

abstract = "This paper sets up a discrete-time model to study the effects of firing costs on labor demand by a firm facing linear adjustment costs under serially independent revenue shocks. It is shown that a rise in firing costs reduces the firm's willingness to hire and fire at the margin, and it reduces its average steady-state labor demand when these costs are low, but raises such demand when they are high.",

keywords = "Labor demand, Linear adjustment costs, Quit rates",

author = "Samuel Bentolila and Gilles Saint-Paul",

year = "1994",

month = sep,

doi = "10.1016/0927-5371(94)90015-9",

language = "English (US)",

volume = "1",

pages = "303--326",

journal = "Labour Economics",

issn = "0927-5371",

publisher = "Elsevier B.V.",

number = "3-4",

}

TY - JOUR

T1 - A model of labor demand with linear adjustment costs

AU - Bentolila, Samuel

AU - Saint-Paul, Gilles

PY - 1994/9

Y1 - 1994/9

N2 - This paper sets up a discrete-time model to study the effects of firing costs on labor demand by a firm facing linear adjustment costs under serially independent revenue shocks. It is shown that a rise in firing costs reduces the firm's willingness to hire and fire at the margin, and it reduces its average steady-state labor demand when these costs are low, but raises such demand when they are high.

AB - This paper sets up a discrete-time model to study the effects of firing costs on labor demand by a firm facing linear adjustment costs under serially independent revenue shocks. It is shown that a rise in firing costs reduces the firm's willingness to hire and fire at the margin, and it reduces its average steady-state labor demand when these costs are low, but raises such demand when they are high.

KW - Labor demand

KW - Linear adjustment costs

KW - Quit rates

UR - http://www.scopus.com/inward/record.url?scp=0000618979&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0000618979&partnerID=8YFLogxK

U2 - 10.1016/0927-5371(94)90015-9

DO - 10.1016/0927-5371(94)90015-9

M3 - Article

AN - SCOPUS:0000618979

SN - 0927-5371

VL - 1

SP - 303

EP - 326

JO - Labour Economics

JF - Labour Economics

IS - 3-4

ER -

A model of labor demand with linear adjustment costs

Abstract

Keywords

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this