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Employment Dynamics and the Structure of Labor Adjustment Costs
J23 - Employment Determination; Job Creation; Demand for Labor; Self-Employment
J63 - Turnover; Vacancies; Layoffs
In this paper we discuss the structure of labor adjustment costs in relationship to the dynamics of job and worker flows. Using high frequency data, we document a previously unsuspected degree of lumpiness in employment adjustment, which is characteristic of non-convex adjustment costs. By means of the statistical analysis of duration data, we relate that lumpiness to the structure of adjustment costs and not to the structure of shocks.