Mecikovsky, Ariel Matias; Maier, Matthias - 2014 - This version: February 26, 2014, Preliminary and incomplete
Using quarterly worker flow data of U.S. establishments, we find that an unexpected increase in uncertainty reduces … hirings and quits, while it raises layoffs. This finding suggests that the real option effect of uncertainty is less important … for employment decisions. Hence plants do not freeze in response to uncertainty shocks. To explain our findings, we …
