Output Fluctuations and Firm #Recruitment Effort https://d.repec.org/n?u=RePEc:iza:izadps:dp18068&r=&r=eur
"… correlations between output growth and job advertisement posting are weak, which might seem at odds with theoretical predictions. Further analysis, however, reveals that the relationship between output growth and the advertisement rate masks important di!erences that relate to the persistence of output growth shocks. Decomposing output growth into permanent and transitory components… we find that only permanent shocks exhibit quantitatively significant correlations with the advertisement rate. Specifically, a one standard deviation positive permanent shock is associated with an increase in the advertisement rate equal to 10–16% of the standard deviation of postings, depending on whether output is measured as revenue or value-added. In contrast, transitory shocks are essentially unrelated to the advertisement rate.

This selective adjustment behavior aligns with theoretical models emphasizing costly #vacancy creation and #searchFrictions, and highlights the importance of shock decomposition for understanding firm #hiring dynamics."
#LaborEcon #oja