Costain, James; Jansen, Marcel - In: Scandinavian Journal of Economics 112 (2010) 4, pp. 782-811
We study the cyclical dynamics of job creation and destruction when workers' effort is not perfectly observable. The no-shirking constraint may amplify fluctuations in hiring by making firms' surplus share procyclical, and may cause a burst of inefficient firing when a downturn begins. But...