This study postulates an internal labor market in which workers accumulate firm-specific human capital that raises the value of the firm and insulates it to some extent from the vagaries of product demand that might result in its closing. Negative product-market shocks reduce wage growth and...

The theory of the dynamics of labor demand is based either on the costs of adjusting the level of employment or on the costs of hiring or firing (of gross changes in employment). We write down a generalized cost of adjustment function that includes both types of cost and allows for asymmetries...

We estimate substitution possibilities among a set of age-race-sex groups in the labor force. The estimates are based on cross-section data from SMSAs in 1969,and they allow us to consider how substitutable adult women are for young women or young men. The estimates are used, along with...

There has been a wide variety of research on worker-hours substitution and the effects of various costs on the speed and extent to which labor demand adjusts. Much of this literature, though, confuses various types of fixed costs and fails to provide a guide for identifying how changes in...

This essay sets out a framework for evaluating empirical work in terms of the ability of the data to provide adequate parameter estimates and hypothesis tests about the true underlying structure. Problems of aggregation, representativeness and structural change are discussed in detail. These...

The implications of downward nominal and ex ante real wage rigidity,and of wage contracting for the dispersion of relative wage changes in the presence of price inflation are examined. Rigidity implies that unexpected inflation will raise the variability of relative wage changes; contracting...

We provide a unified discussion of the relations among flows of workers, changes in employment and changes in the number of jobs at the level of the firm. Using the only available set of data (a nationally representative sample of Dutch firms in 1988 and 1990) we discover that: 1) Nearly half of...

I argue for increased reliance on non-U.S. data and policy evaluations to understand basic labor- market parameters and to predict the effects of changes in U.S. labor-market policies. Foreign experiences generate exogenous shocks to labor costs that create unusual opportunities to measure...

This study examines what one can infer from aggregate time-series of employment under the assumption that adjustment at the micro level is discrete because of lumpy adjustment costs. The research uses various sets of quarterly and monthly data for the United States and imposes assumptions about...

Firms' beliefs that they may be unable to sell as much as they would like at the market price leads not only to a quantity spillover (even when prices are flexible) but also to a spillover of product demand elasticity onto the elasticity of labor demand. Hence, optimal firm behavior can be...