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Labour Hoarding, Price and Labour Market Rigidities

Objective



Research objectives and content

The objective of the research is to try to explain why firms hold excess labour during contractions, that is, to explain labour hoarding. Why, in a downturn, some workers are paid to do nothing (or every worker works less intensely than normal) as is empirically validated by Fay and Medoff (1985)*? There is now a revival of interest on this topic, particularly in the real business cycle theories. However, the explanations that are given to this phenomenon are not entirely satisfactory. The project that I plan to carry out at Aarhus University is to explain labour hoarding, using labour market rigidities and different hypotheses on price rigidities. * Fay J.A. and J.L. Medoff (1985), "Labor and output over the business cycle: Some direct evidence", American Economic Review, vol. 75, pp. 638-655.

Training content (objective, benefit and expected impact)

The objective of a stay at Aarhus University is to meet people that are specialists on the topics of price rigidities and on labour market rigidities. I hope it will be possible to write several articles in collaboration with scientists of the host Institution.

These articles would be submitted to international journals; hoping that they could help to a better theoretical understanding of labour hoarding.

Links with industry / industrial relevance (22)

Funding Scheme

RGI - Research grants (individual fellowships)

Coordinator

UNIVERSITY OF AARHUS
Address
1,Universitetsparken, Building 350
8000 Aarhus C
Denmark