Research Insights: How Do Job and Worker Flows Respond to Firms' Idiosyncratic Technology and Demand Shocks?

2020 ◽  
Author(s):  
Mikael Carlsson ◽  
Julián Messina ◽  
Oskar Nordström Skans
Keyword(s):  
Standard Deviation ◽  
Employment Rate ◽  
Demand Shock ◽  
Demand Shocks ◽  
Worker Flows ◽  
Percentage Points ◽  
Long Run ◽  
Main Driver ◽  
Technology Shock

Permanent demand shocks are the main driver of labor adjustments. A one standard deviation demand shock increases the net employment rate by 6 percentage points in the long run, while a technology shock increases it by 0.5. Transitory demand shocks have much smaller impacts. When hit by a permanent demand shock, firms adjust fast and symmetrically. Most of the labor change occurs within a year. If the shock is positive, firms adjust by increasing hires. If the shock is negative, they increase separations without reducing hires.

THE HOURS WORKED–PRODUCTIVITY PUZZLE: IDENTIFICATION IN A FRACTIONAL INTEGRATION SETTING

2014 ◽  
Vol 19 (7) ◽  
pp. 1593-1621 ◽  
Author(s):  
Yuliya Lovcha ◽  
Alejandro Perez-Laborda
Keyword(s):  
Business Cycle ◽  
Fractional Integration ◽  
Real Business Cycle ◽  
Data Sets ◽  
Sampling Uncertainty ◽  
Hours Worked ◽  
Long Run ◽  
The Hours ◽  
Short Run ◽  
Technology Shock

A recent finding of the SVAR literature is that the response of hours worked to a (positive) technology shock depends on the assumed order of integration of the hours. In this work we relax this assumption, allowing fractional integration in hours and productivity. We find that the sign and magnitude of the estimated responses depend crucially on the identification assumptions employed. Although the responses of hours recovered with short-run (SR) restrictions are positive in all data sets, long-run (LR) identification results in negative, although sometimes not significant responses. We check the validity of these assumptions with the Sims procedure, concluding that both LR and SR are appropriate to recover responses in a fractionally integrated VAR. However, the application of the LR scheme always results in an increase in sampling uncertainty. Results also show that even the negative responses found in the data could still be compatible with real business cycle models.

Demand Shocks and Firm Investment: Micro-evidence from fiscal retrenchment in Italy

2021 ◽  
Author(s):  
Decio Coviello ◽  
Immacolata Marino ◽  
Tommaso Nannicini ◽  
Nicola Persico
Keyword(s):  
Capital Investment ◽  
Firm Investment ◽  
Demand Shock ◽  
Demand Shocks ◽  
Legislative Change ◽  
Fiscal Retrenchment ◽  
Theoretical Mechanism ◽  
Identification Strategy

Abstract We study the effect of a persistent demand shock on corporate factor utilization. Our identification strategy leverages a legislative change designed to permanently reduce spending in certain targeted municipalities. This change generates an arguably-exogenous drop in the revenue of procurement firms, which differs depending on each firm’s reliance for its revenue on procurement in the targeted municipalities. We find that firms responded to the demand shock by cutting capital rather than labor. We propose a theoretical mechanism based on the irreversibility of capital investment.

scholarly journals Banking and Industrialization

2018 ◽  
Vol 17 (6) ◽  
pp. 1753-1796 ◽  
Author(s):  
Stephan Heblich ◽  
Alex Trew
Keyword(s):  
Standard Deviation ◽  
Industrial Revolution ◽  
Employment Growth ◽  
Standard Deviation Increase ◽  
Percentage Points ◽  
Industrial Employment ◽  
Employment Share ◽  
Capital Intensive ◽  
Employment Data

AbstractWe establish a causal role for banking access in the spread of the Industrial Revolution over the period 1817–1881 by exploiting unique employment data from 10,528 parishes across England and Wales and a novel instrument. We estimate that a one standard deviation increase in 1817 finance employment increases annualized industrial employment growth by 0.93 percentage points. We establish the role of structural transformation as an underlying growth mechanism and show that banking access: (i) increases the industrial employment share; (ii) stimulates urbanization; and (iii) fosters inter-industry transition to high TFP, intermediate and capital-intensive sub-sectors.

Research Insights: Can Low-Cost Communication Technologies Bridge Information Gaps between Schools and Parents?

2021 ◽  
Author(s):  
Samuel Berlinski ◽  
Matías Busso ◽  
Taryn Dinkelman ◽  
Claudia Martínez
Keyword(s):  
At Risk ◽  
Standard Deviation ◽  
High Frequency ◽  
Low Cost ◽  
At Risk Students ◽  
Communication Technologies ◽  
Text Messages ◽  
School Absenteeism ◽  
School Behavior ◽  
Percentage Points

We document large gaps between parents knowledge and school reports of students attendance and grades. Sending frequent text messages with information on attendance, grades and school behavior shrinks those gaps. Parents of at-risk students adjust their understanding of their children's performance to the greatest degree. High-frequency text messages had positive impacts on grades and attendance. Math GPA increased 0.08 of a standard deviation; the probability of earning a passing grade in math increased by 2.7 percentage points (relative to a mean of 90 percent). The intervention also reduced school absenteeism by 1 percentage point and increased the share of students who met attendance requirements for grade promotion by 4.5 percentage points.

scholarly journals School Uniforms, Short-Run Participation, and Long-Run Outcomes: Evidence from Kenya

2020 ◽  
Author(s):  
David K Evans ◽  
Mũthoni Ngatia
Keyword(s):  
Educational Interventions ◽  
School Uniforms ◽  
Completion Rates ◽  
Percentage Points ◽  
Long Run ◽  
Short Run ◽  
School Uniform ◽  
The Impact ◽  
Improve Access

Abstract In recent decades, the number of evaluated interventions to improve access to school has multiplied, but few studies report long-term impacts. This paper reports the impact of an educational intervention that provided school uniforms to children in poor communities in Kenya. The program used a lottery to determine who would receive a school uniform. Receiving a uniform reduced school absenteeism by 37 percent for the average student (7 percentage points) and by 55 percent for children who initially had no uniform (15 percentage points). Eight years after the program began, there is no evidence of sustained impact of the program on highest grade completed or primary school completion rates. A bounding exercise suggests no substantive positive, long-term impacts. These results contribute to a small literature on the long-run impacts of educational interventions and demonstrate the risk of initial impacts depreciating over time.

scholarly journals Regulatory Spillovers in Common Audit Markets

2020 ◽  
Vol 66 (8) ◽  
pp. 3389-3411 ◽  
Author(s):  
Raphael Duguay ◽  
Michael Minnis ◽  
Andrew Sutherland
Keyword(s):  
Nonprofit Organizations ◽  
Private Companies ◽  
Demand Shock ◽  
Financial Reports ◽  
Public Companies ◽  
Audit Market ◽  
Sarbanes Oxley ◽  
Long Run ◽  
Audit Fee ◽  
Short Run

We find that Sarbanes–Oxley (SOX) had two significant effects on the audit market for nonpublic entities. The first short-run effect stems from inelastic labor supply coupled with an audit demand shock from public companies. As a result, private companies reduced their use of attested financial reports in bank financing by 12%, and audit fee increases for nonprofit organizations (NPOs) more than doubled. The second long-run effect was a transformation in the audit supply structure. After SOX, NPOs were less likely to match with auditors most exposed to public companies, whereas auditors increasingly specialized their offices based on client type. Audit market concentration for NPOs dropped by more than one-half within five years of SOX and remained at this level through the end of our sample in 2013, whereas the number of suppliers increased by 26%. Our results demonstrate how regulation directed at public companies generates economically important spillovers for nonpublic entities. This paper was accepted by Suraj Srinivasan, accounting.

scholarly journals Flexible Supply of Apprenticeship in the British Industrial Revolution

2017 ◽  
Vol 77 (1) ◽  
pp. 208-250 ◽  
Author(s):  
Nadav Ben Zeev ◽  
Joel Mokyr ◽  
Karine van der Beek
Keyword(s):  
Instrumental Variable ◽  
Industrial Revolution ◽  
Vector Autoregression ◽  
Variable Method ◽  
Response Functions ◽  
Economic Success ◽  
Demand Shocks ◽  
Long Run ◽  
Instrumental Variable Method

We use annual information on apprenticeships in England between 1710–1805 to estimate the dynamic supply-responsiveness in this market in the presence of the increasingly powerful technological shocks as the Industrial Revolution proceeded apace. Using both an Instrumental Variable method and a dynamic Vector Autoregression framework (VAR) system to identify the long-run response functions, we find evidence of an elastic supply, sufficiently high as to allow quantities to rise considerably in response to demand shocks. This finding lends support to the view that Britain's apprenticeship institution was the source of its advantage in skilled mechanical labor, so critical to its economic success.

The effect of supply and demand shocks on the non-market valuation of local public goods

1999 ◽  
Vol 4 (4) ◽  
pp. 471-492 ◽  
Author(s):  
J.R. DESHAZO
Keyword(s):  
Public Goods ◽  
Transition Period ◽  
Supply And Demand ◽  
Local Public Goods ◽  
Cross Sectional ◽  
Demand Shocks ◽  
Supply And Demand Shocks ◽  
Long Run ◽  
Non Market Valuation ◽  
Spatial Arbitrage

For local public goods, supply or demand shocks may create periods during which it is welfare enhancing for households to undertake spatial arbitrage by relocating residentially. We point out that the magnitude and direction of the average benefit estimate obtained during such a transition period is likely to vary systematically depending upon the magnitude of the shock, the level of transaction costs and the extent to which other affected goods are substitutes or complements. We test a subset of our model's predictions using cross-sectional data on household demand for improved municipal services in post-socialist Romania. Our preliminary empirical analysis suggests that there have been substantial gains in welfare resulting from spatial adjustment following the opening up of housing markets. Furthermore, our results indicate that benefit estimates for improved water services during the transition may be substantially higher than long-run estimates. This limited evidence supports our concern that economists may recommend non-optimal levels of long-run investment, regulation, or user fees if they are unaware of the implications of future readjustment to supply or demand shocks.

scholarly journals On Marshallian theory of demand and short-run equilibrium

2020 ◽  
Author(s):  
William Icefield
Keyword(s):  
Monopolistic Competition ◽  
Effective Demand ◽  
Market Clearing ◽  
Demand Shocks ◽  
Long Run ◽  
Short Run ◽  
Independent Variable ◽  
Demand Effects ◽  
Long Run Equilibrium

Mainstream neoclassical models lack genuine demand effects satisfying the principle of effective demand even with monopolistic competition, without addition of so-called frictions, such as inflexible price. There can only be demand shocks. Price is considered to be an independent variable, instead of quantity. But as Alfred Marshall original envisioned, we can instead think of quantity as an independent variable, along with associated equilibrium convergence via quantity adjustments. This allows us to consider a short-run market-clearing equilibrium with less demand than a long-run equilibrium, in contrast to mainstream models without frictions and shocks, with validation of the principle of effective demand.

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