IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v29y2005i4p535-557.html
   My bibliography  Save this article

Is labour becoming more or less flexible? Changing dynamic behaviour and asymmetries of labour input in US manufacturing

Author

Listed:
  • Stuart Glosser
  • Lonnie Golden

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. Copyright 2005, Oxford University Press.

Suggested Citation

  • Stuart Glosser & Lonnie Golden, 2005. "Is labour becoming more or less flexible? Changing dynamic behaviour and asymmetries of labour input in US manufacturing," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 29(4), pages 535-557, July.
    • Handle: RePEc:oup:cambje:v:29:y:2005:i:4:p:535-557
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/cje/bei006
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael P. Keane & Eswar S. Prasad, 1991. "The relation between skill levels and the cyclical variability of employment, hours and wages," Discussion Paper / Institute for Empirical Macroeconomics 41, Federal Reserve Bank of Minneapolis.
    2. Robert A Hart & James R Malley, 1993. "Excess Labour and the Business Cycle: A Comparativer Study of Japan, Germany, the United Kingdom and the United States," Working Papers Series 93/6, University of Stirling, Division of Economics.
    3. Katharine G. Abraham & Susan N. Houseman, 1993. "Job Security and Work Force Adjustment: How Different are U.S. and Japanese Practices?," Book chapters authored by Upjohn Institute researchers, in: Christopher F. Buechtemann (ed.),Employment Security and Labor Market Behavior: Interdisciplinary Approaches and International Evidence, pages 180-199, W.E. Upjohn Institute for Employment Research.
    4. Howell, David R & Wolff, Edward N, 1992. "Technical Change and the Demand for Skills by U.S. Industries," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 16(2), pages 127-146, June.
    5. Burgess, Simon M & Dolado, Juan J, 1989. "Intertemporal Rules with Variable Speed of Adjustment: An Application to U.K. Manufacturing Employment," Economic Journal, Royal Economic Society, vol. 99(396), pages 347-365, June.
    6. repec:bla:scandj:v:99:y:1997:i:2:p:315-33 is not listed on IDEAS
    7. Tor Jacobson & Henry Ohlsson, 2000. "Working time, employment, and work sharing: Evidence from Sweden," Empirical Economics, Springer, vol. 25(1), pages 169-187.
    8. Glosser, Stuart M. & Golden, Lonnie, 1997. "Average work hours as a leading economic variable in US manufacturing industries," International Journal of Forecasting, Elsevier, vol. 13(2), pages 175-195, June.
    9. Kjell G. Salvanes, 1997. "Market Rigidities and Labour Market Flexibility: An International Comparison," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 315-333, June.
    10. Cho, Jang-Ok & Cooley, Thomas F., 1994. "Employment and hours over the business cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 18(2), pages 411-432, March.
    11. Robert J. Gordon, 1993. "The Jobless Recovery: Does It Signal a New Era of Productivity-led Growth?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 271-316.
    12. Madrian, Brigitte & Cutler, David, 1998. "Labor Market Responses to Rising Health Insurance Costs," Scholarly Articles 2643643, Harvard University Department of Economics.
    13. Basil J. Moore, 1995. "Sluggish Job Growth: Rising Productivity, Anemic Recovery, or Something Else?," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 17(3), pages 473-477, April.
    14. Millard, Stephen & Scott, Andrew & Sensier, Marianne, 1997. "The Labour Market over the Business Cycle: Can Theory Fit the Facts?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 13(3), pages 70-92, Autumn.
    15. Jennifer Hunt, 2000. "Firing Costs, Employment Fluctuations and Average Employment: An Examination of Germany," Economica, London School of Economics and Political Science, vol. 67(266), pages 177-202, May.
    16. Matthew J. Slaughter, 1997. "International Trade and Labor-Demand Elasticities," NBER Working Papers 6262, National Bureau of Economic Research, Inc.
    17. David M. Cutler & Brigitte C. Madrian, 1998. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 509-530, Autumn.
    18. Robert M. Costrell, 1982. "Overhead Labor and the Cyclical Behavior of Productivity and Real Wages," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 4(2), pages 277-290, January.
    19. Michael Keane & Eswar Prasad, 1993. "Skill Levels and the Cyclical Variability of Employment, Hours, and Wages," IMF Staff Papers, Palgrave Macmillan, vol. 40(4), pages 711-743, December.
    20. Quandt, Richard E & Rosen, Harvey S, 1989. "Endogenous Output in an Aggregate Model of the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 394-400, August.
    21. Hamermesh, Daniel S, 1995. "Labour Demand and the," Economic Journal, Royal Economic Society, vol. 105(430), pages 620-634, May.
    22. Bernard, Andrew B. & Jensen, J. Bradford, 1997. "Exporters, skill upgrading, and the wage gap," Journal of International Economics, Elsevier, vol. 42(1-2), pages 3-31, February.
    23. Smyth, David J & Karlson, Stephen H, 1991. "The Effect of Fringe Benefits on Employment Fluctuations in U.S. Automobile Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 40-49, February.
    24. Appelbaum, Elie & Kohli, Ulrich, 1998. "Import-Price Uncertainty, Production Decisions, and Relative Factor Shares," Review of International Economics, Wiley Blackwell, vol. 6(3), pages 345-360, August.
    25. Machin, Steve, 1994. "Changes in the Relative Demand for Skills in the UK Labour Market," CEPR Discussion Papers 952, C.E.P.R. Discussion Papers.
    26. Krane, Spencer D, 1994. "The Distinction between Inventory Holding and Stockout Costs: Implications for Target Inventories, Asymmetric Adjustment, and the Effect of Aggregation on Production Smoothing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 117-136, February.
    27. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    28. George L. Perry & Charles L. Schultze, 1993. "Was This Recession Different? Are They All Different?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 145-212.
    29. Kornelius Kraft, 1997. "Hiring and Dismissal Costs in Theory and Practice: A Comparison of Institutional Constraints and Employment Adjustment Patterns in Six OECD Countries," Kyklos, Wiley Blackwell, vol. 50(3), pages 341-368, August.
    30. Mills, David E & Schumann, Laurence, 1985. "Industry Structure with Fluctuating Demand," American Economic Review, American Economic Association, vol. 75(4), pages 758-767, September.
    31. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-284, April.
    32. Mireia Valverde & Olga Tregaskis & Chris Brewster, 2000. "Labor flexibility and firm performance," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(4), pages 649-661, November.
    33. Haskel, Jonathan & Kersley, Barbara & Martin, Christopher, 1997. "Labour Market Flexibility and Employment Adjustment: Micro Evidence from UK Establishments," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 362-379, July.
    34. Van Audenrode, Marc A, 1994. "Short-Time Compensation: Job Security, and Employment Contracts: Evidence from Selected OECD Countries," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 76-102, February.
    35. Price, Simon, 1994. "Aggregate Uncertainty, Forward Looking Behaviour and the Demand for Manufacturing Labour in the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(3), pages 267-283, August.
    36. Bosch, Gerhard & Lehndorff, Steffen, 2001. "Working-Time Reduction and Employment: Experiences in Europe and Economic Policy Recommendations," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(2), pages 209-243, March.
    37. Arne L. Kalleberg, 2001. "Organizing Flexibility: The Flexible Firm in a New Century," British Journal of Industrial Relations, London School of Economics, vol. 39(4), pages 479-504, December.
    38. Burgess, Simon M & Knetter, Michael M, 1998. "An International Comparison of Employment Adjustment to Exchange Rate Fluctuations," Review of International Economics, Wiley Blackwell, vol. 6(1), pages 151-163, February.
    39. repec:bla:econom:v:62:y:1995:i:248:p:495-505 is not listed on IDEAS
    40. Basil J. Moore, 1995. "Sluggish Job Growth: Rising Productivity, Anemic Recovery, or Something Else?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 17(3), pages 473-478, March.
    41. Charles A. Fleischman, 1996. "The endogeneity of employment adjustment costs: the tradeoff between efficiency and flexibility," Finance and Economics Discussion Series 1996-48, Board of Governors of the Federal Reserve System (U.S.).
    42. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-144, January.
    43. repec:bla:kyklos:v:50:y:1997:i:3:p:341-68 is not listed on IDEAS
    44. Raisian, John, 1983. "Contracts, Job Experience, and Cyclical Labor Market Adjustments," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 152-170, April.
    45. Barry Bluestone & Stephen Rose, 1998. "The Macroeconomics of Work Time," Review of Social Economy, Taylor & Francis Journals, vol. 56(4), pages 425-441.
    46. Hart,Robert A. & Moutos,Thomas, 2008. "Human Capital, Employment and Bargaining," Cambridge Books, Cambridge University Press, number 9780521061032, October.
    47. Daniel S. Hamermesh, 1993. "Labor Demand and the Source of Adjustment Costs," NBER Working Papers 4394, National Bureau of Economic Research, Inc.
    48. repec:bla:econom:v:54:y:1987:i:214:p:237-48 is not listed on IDEAS
    49. Zelhorst, Dick & de Haan, Jakob, 1995. "Testing for a Break in Output: New International Evidence," Oxford Economic Papers, Oxford University Press, vol. 47(2), pages 357-362, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lonnie Golden & Stuart Glosser, 2013. "Work sharing as a potential policy tool for creating more and better employment: A review of the evidence," Chapters, in: Jon C. Messenger & Naj Ghosheh (ed.), Work Sharing during the Great Recession, chapter 7, pages 203-258, Edward Elgar Publishing.
    2. Appelbaum, Elie & Kohli, Ulrich, 1998. "Import-Price Uncertainty, Production Decisions, and Relative Factor Shares," Review of International Economics, Wiley Blackwell, vol. 6(3), pages 345-360, August.
    3. W A Jackson, 2015. "Markets and the Meaning of Flexibility," Economic Issues Journal Articles, Economic Issues, vol. 20(2), pages 45-65, September.
    4. Alois Guger & Thomas Leoni, 2006. "Teilstudie 15: Arbeitsmarktflexibilität und soziale Absicherung," WIFO Studies, WIFO, number 27454.
    5. Alois Guger, 2007. "WIFO-Weißbuch: Arbeitsmarktflexibilität und soziale Absicherung," WIFO Monatsberichte (monthly reports), WIFO, vol. 80(5), pages 469-481, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Glosser, Stuart M. & Golden, Lonnie, 1997. "Average work hours as a leading economic variable in US manufacturing industries," International Journal of Forecasting, Elsevier, vol. 13(2), pages 175-195, June.
    2. Lonnie Golden & Stuart Glosser, 2013. "Work sharing as a potential policy tool for creating more and better employment: A review of the evidence," Chapters, in: Jon C. Messenger & Naj Ghosheh (ed.), Work Sharing during the Great Recession, chapter 7, pages 203-258, Edward Elgar Publishing.
    3. Benoît Pierre FREYENS, 2010. "Measuring firing costs: The case for direct methods," International Labour Review, International Labour Organization, vol. 149(3), pages 287-313, September.
    4. Robertson, Raymond & Dutkowsky, Donald H., 2002. "Labor adjustment costs in a destination country: the case of Mexico," Journal of Development Economics, Elsevier, vol. 67(1), pages 29-54, February.
    5. William R. Johnson, 2011. "Fixed Costs and Hours Constraints," Journal of Human Resources, University of Wisconsin Press, vol. 46(4), pages 775-799.
    6. Françoise Delmez & Vincent Vandenberghe, 2017. "Working long hours: less productive but less costly? Firm-level evidence from Belgium," LIDAM Discussion Papers IRES 2017022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Jung, Sven, 2013. "Employment Adjustment in German Firms," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79696, Verein für Socialpolitik / German Economic Association.
    8. Pourpourides, Panayiotis M., 2011. "Implicit contracts and the cyclicality of the skill-premium," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 963-979, June.
    9. Sherif Khalifa, 2009. "Heterogeneous Workers and Occupations: Inequality, Unemployment, and Crowding Out," Southern Economic Journal, John Wiley & Sons, vol. 75(4), pages 1141-1164, April.
    10. Sébastien Jean, 2000. "The Effect of International Trade on Labor‐Demand Elasticities: Intersectoral Matters," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 504-516, August.
    11. Christine Jolls, 2007. "Employment Law and the Labor Market," NBER Working Papers 13230, National Bureau of Economic Research, Inc.
    12. Jennifer Feenstra Schultz & David Doorn, 2009. "Employer Health Benefit Costs and Demand for Part-Time Labor," Working Papers 09-08, Center for Economic Studies, U.S. Census Bureau.
    13. Thijs van Rens & Almut Balleer, 2007. "Cyclical Skill-Biased Technological Change," 2007 Meeting Papers 62, Society for Economic Dynamics.
    14. Brigitte C. Madrian & Lars John Lefgren, 1999. "A Note on Longitudinally Matching Current Population Survey (CPS) Respondents," NBER Technical Working Papers 0247, National Bureau of Economic Research, Inc.
    15. Nilsen, Oivind A. & Salvanes, Kjell G. & Schiantarelli, Fabio, 2007. "Employment changes, the structure of adjustment costs, and plant size," European Economic Review, Elsevier, vol. 51(3), pages 577-598, April.
    16. Velamuri, Malathi, 2009. "Taxes, Health Insurance and Women’s Self-Employment," MPRA Paper 15731, University Library of Munich, Germany.
    17. Laura Bucila, 2008. "Employment-Based Health Insurance and the Minimum Wage," Working Papers 0812, College of the Holy Cross, Department of Economics.
    18. Mauricio Cardenas & Raquel Bernal, 2004. "Determinants of Labor Demand in Colombia. 1976-1996," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 229-272, National Bureau of Economic Research, Inc.
    19. Carlos A. Arango & Ángela Milena Rojas, 2003. "Demanda laboral y reforma comercial en el sector manufacturero colombiano: 1977-1999," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 21(44), pages 96-154, December.
    20. Kölling, Arnd, 1998. "Dynamische Arbeitsnachfrage und asymmetrisches Anpassungsverhalten in der Bundesrepublik Deutschland : eine Untersuchung mit Daten aus dem IAB-Betriebspanel (Dynamic labour demand and asymmetrical adj," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(4), pages 637-647.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:29:y:2005:i:4:p:535-557. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/cje .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.