TY  - RPRT
        AU  - Kudoh, Noritaka
AU  - Miyamoto, Hiroaki
AU  - Sasaki, Masaru
        TI  - Employment and Hours over the Business Cycle in a Model with Search Frictions
        PY  - 2015/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8946
        UR  - https://www.iza.org/publications/dp8946
        AB  - This paper studies a labor market search-matching model with multi-worker firms to investigate how firms utilize the extensive and intensive margins over the business cycle. The earnings function derived from the Stole-Zwiebel bargaining acts as an adjustment cost function for employment and hours. We calibrate the model to match the Japanese labor market, in which the intensive margin accounts for 79% of the variations in total working hours. The model replicates the observed cyclical behavior of hours of work, but fails to generate employment volatility of realistic magnitude. Additional penalties for longer hours of work do not resolve this issue. Wage rigidity and persistent shocks are promising lines of further investigations.
        KW  - multi-worker firms
KW  - search
KW  - hours of work
KW  - business cycles
        ER  -