Employment fluctuations in a dynamic model with long-term and short-term contracts

Matsue, Toyoki (2019): Employment fluctuations in a dynamic model with long-term and short-term contracts.

Abstract

Fluctuations in employment are one of the central issues in the labor market literature and have been investigated in a number of empirical and theoretical studies. This study presents a dynamic framework that can analyze the economy in which long-term and short-term contracts coexist. The particular differences between long-term and short-term contracts are stickiness of employment adjustments and explicit employment duration. The simulation results show that the large short-term employment ratio and the high quit rate lead to the high variations in employment. Moreover, they indicate that the large adjustment cost and the long employment duration bring about decreased employment fluctuations.

• Item Type: MPRA Paper
• Language: English
• Keywords: employment dynamics; dynamic labor demand; labor market institutions; adjustment cost; employment duration
• Subjects: D - Microeconomics > D9 - Intertemporal Choice > D90 - General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J32 - Nonwage Labor Costs and Benefits ; Retirement Plans ; Private Pensions; J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Labor Contracts

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