Portuguese Economic Journal

, Volume 2, Issue 1, pp 37–51 | Cite as

Job and worker flows in high adjustment cost settings

Abstract.

This paper analyses the relationship between the size of adjustment costs and the intensity of labor market flows. I argue that high adjustment costs inhibit adjustment to temporary shocks, leaving adjustment to long-lived shocks unchanged. Worker turnover is also reduced because of the negative impact that adjustment costs have on churning.

Keywords:

Adjustment costs Job flows Worker flows 

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Copyright information

© Springer-Verlag Berlin/Heidelberg 2003

Authors and Affiliations

  1. 1.Faculdade de Economia do Porto and CETE,Porto,Portugal

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