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Precautionary Demand for Labor and Firm Size
Title: | Precautionary Demand for Labor and Firm Size |
Authors: | Kudoh, Noritaka Browse this author →KAKEN DB | Sasaki, Masaru Browse this author →KAKEN DB |
Keywords: | labor demand | firm size | search frictions |
Issue Date: | Apr-2010 |
Publisher: | Blackwell Publishing |
Journal Title: | Bulletin of Economic Research |
Volume: | 62 |
Issue: | 2 |
Start Page: | 133 |
End Page: | 153 |
Publisher DOI: | 10.1111/j.1467-8586.2009.00314.x |
Abstract: | This paper studies firms' job creation decisions in a labor market with search frictions. A simple labor market search model is developed in which a firm can search for a second employee while producing with a first worker, and this creates the equilibrium size distribution of firms. A firm expands employment even if the instantaneous payoff to a large firm is less than that of staying small--a firm has a precautionary motive to expand its size. In addition, this motive is enhanced by a greater market tightness. Because of this effect, firms' decisions become interdependent--a firm creates a vacancy if it expects other firms to do the same, creating strategic complementarity among firms and thereby self-fulfilling multiple equilibria. An increase in productivity can cause a qualitative change in labor market tightness and the rate of unemployment. |
Rights: | The definitive version is available at www.blackwell-synergy.com |
Type: | article (author version) |
URI: | http://hdl.handle.net/2115/49128 |
Appears in Collections: | 経済学院・経済学研究院 (Graduate School of Economics and Business / Faculty of Economics and Business) > 雑誌発表論文等 (Peer-reviewed Journal Articles, etc)
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Submitter: 工藤 教孝
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