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Licensed Unlicensed Requires Authentication Published by De Gruyter September 28, 2011

Technology Shocks and Employment: Evidence from U.S. Firm-Level Data

  • Jung-Wook Kim and Hyunbae Chun

By examining firm-level data from the U.S. manufacturing sector, we show that the short-run employment response to technology shock exhibits substantial cross-industry variation. We find that firms in industries with low inventory-sales ratios employ more workers in response to a favorable technology shock, while those with high inventory-sales ratios employ fewer workers. These results are consistent with Chang, Hornstein, and Sarte (2009) who emphasize the role of inventory-holding costs in intertemporal substitution of production. However, we could not find any systematic relationship between employment response to technology shock and the price-stickiness measure.

Published Online: 2011-9-28

©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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