Paper #944

Título:

Organizational capital and employment fluctuations

Autor:

Thijs van Rens

Fecha:

Noviembre 2004

Resumen:

In this paper I present a model in which production requires two types of labor inputs: regular productive tasks and organizational capital, which is accumulated by workers performing organizational tasks. By allocating more workers from organizational to productive tasks, firms can temporarily increase production without hiring. The availability of this intensive margin of labor adjustment, in combination with adjustment costs along the extensive margin (search frictions, firing costs, training costs), makes it optimal to delay employment adjustments. Simulations indicate that this mechanism is quantitatively important even if only a small fraction of workers perform organizational tasks, and explains why the hiring rate is persistent and why employment is slow to recover after the end of a recession.

Palabras clave:

Business cycles, labor market, organizational capital, jobless recoveries

Códigos JEL:

D92, E24, J41, J64

Área de investigación:

Macroeconomía y Economía Internacional

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