Linear Adjustment Costs and Seasonal Labor Demand: Evidence from Retail Trade Firms

摘要: Standard models of dynamic labor demand rely on the presence adjustment costs to explain observed smoothness in employment patterns, although are often difficult quantify. The experience rating feature U. S. Unemployment Insurance (UI) system provides a measurable linear cost adjustment. Using unique data set with administrative over 8000 firms, I estimate effect UI-induced seasonal retail trade. find strong support for large role reducing response firms fluctuations demand.