Is Labour Becoming More or Less Flexible? Changing Dynamic Behaviour and Asymmetries of Labour Input in Us Manufacturing

Posted: 29 Feb 2008

See all articles by Lonnie Golden

Lonnie Golden

Pennsylvania State University - Abington College; Economic Policy Institute; Project for Middle Class Renewal

Stuart Glosser

University of Wisconsin at Whitewater

Date Written: July 2005

Abstract

Have employment and hours become more flexible over time? Vector auto-regressions are estimated using monthly time-series data to generate impulse responses, which reflect the dynamic response of employment and average hours of labour input following a given shock in output demand. A marked change in the US manufacturing sector occurred after 1979. Although there is heterogeneity by industry and asymmetry over the business cycle, hours have become somewhat more and employment considerably less flexible, particularly during expansion phases. Employers are apparently delaying hiring and relying more on using hours as a buffer to absorb fluctuations in output demand.

Keywords: Hours of work, Employment adjustment, Labour flexibility, Labour markets, VARs

Suggested Citation

Golden, Lonnie and Glosser, Stuart, Is Labour Becoming More or Less Flexible? Changing Dynamic Behaviour and Asymmetries of Labour Input in Us Manufacturing (July 2005). Cambridge Journal of Economics, Vol. 29, Issue 4, pp. 535-557, 2005, Available at SSRN: https://ssrn.com/abstract=904447

Lonnie Golden

Pennsylvania State University - Abington College ( email )

1600 Woodland Rd.
Abington, PA 19001
United States
215-881-7596 (Phone)
215-881-7333 (Fax)

Economic Policy Institute ( email )

1660 L Street NW, Suite 1200
Washington, DC 20036
United States

Project for Middle Class Renewal ( email )

1408 W. Gregory Dr.
Urbana, IL 61801
United States

Stuart Glosser (Contact Author)

University of Wisconsin at Whitewater ( email )

800 W. Main
Whitewater, WI 53190
United States

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