RT Journal Article
T1 Firing costs, misallocation, and aggregate productivity
A1 Da Rocha Álvarez, José María
A1 Restucia, Diego
A1 Tavares, Marina Mendes
K1 5307.03 Modelos y Teorías del desarrollo Económico
K1 5307.04 Estudios de desarrollo económico
K1 5307.14 Teoría Macroeconómica
AB We study the impact of firing costs on aggregate total factor productivity (TFP) in a dynamic general-equilibrium framework where the evolution of establishment-level productivity is not invariant to the policy. Firing costs not only generate static factor misallocation, but also distort the selection of establishment's growth by size, contributing to larger aggregate TFP losses. Numerical experiments indicate that firing costs equivalent to 5 year's wages imply a reduction in TFP of more than 20%. Factor misallocation accounts for 20% of the productivity loss, whereas the remaining 80% arises from distorted selection in the productivity process.
PB Journal of Economic Dynamics and Control
SN 01651889
YR 2019
FD 2019-01
LK http://hdl.handle.net/11093/1195
UL http://hdl.handle.net/11093/1195
LA eng
NO Journal of Economic Dynamics and Control, 98, 60-81 (2019)
DS Investigo
RD 07-dic-2023