蝌蚪网 Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Temporary Layoffs, Firm Entry and Exit Dynamics, and Aggregate Fluctuations
蝌蚪网 Journal: Macroeconomics
(pp. 1–44)
Abstract
We build a model to study how the countercyclicality of temporary layoffs affects unemployment, firm entry and exit, and macroeconomic fluctuations. The model can quantitatively generate the rich cyclical dynamics of temporary layoffs, unemployment, and firms in US data. The cyclicality of temporary layoffs plays a key role in limiting the contraction in job creation and the rise in unemployment during recessions. Amid factual wage dynamics, the countercyclical buffer from temporary layoffs extends beyond the labor market and contributes to shallower contractions in the number of firms and GDP, but has little influence on the pace of recoveries.Citation
Chugh, Sanjay K., and Alan Finkelstein Shapiro. 2025. "Temporary Layoffs, Firm Entry and Exit Dynamics, and Aggregate Fluctuations." 蝌蚪网 Journal: Macroeconomics 17 (4): 1–44. DOI: 10.1257/mac.20230217Additional Materials
JEL Classification
- E23 Macroeconomics: Production
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E32 Business Fluctuations; Cycles
- J23 Labor Demand
- J63 Labor Turnover; Vacancies; Layoffs