Labor Hoarding

The practice in which a company does not lay off employees when it otherwise would (as during a recession). Labor hoarding is high risk as it reduces a company's profitability during a difficult time, but it guarantees employee talent will be available to that company (and, just as importantly, not to its competitors) when growth resumes.

References in periodicals archive ?

What is less appreciated is the phenomenon of labor's rising share of income well in advance of the peak in economic activity and for reasons unrelated to labor hoarding.

Good news for the Fed: wage inflation is beginning to turn up, but Yellen will still run the economy "hot."

In a fascinating retrospective, Biddle (2014) traces intellectual thought on the cyclical behavior of productivity to its early foundations and explains how labor hoarding emerged as the leading explanation.

Productive recessions and jobless recoveries

Eight essays by international contributors explore topics such as the shaping of public economic discourse in postwar America, American institutionalism after 1945, the genealogy of the labor hoarding concept, and what to tell a graduate course in macroeconomics about Keynes.

A Research Annual

Because of labor hoarding, worker productivity is a poor measure of worker capability at various points in the business cycle.

It's lousy being you (unless you're rich)

The most common explanation that does not involve supply shocks is the practice of labor hoarding by firms (Abel, Bernanke and Croushore).

Why have the dynamics of labor productivity changed?

For example, what appears to be a decrease in productivity during a recession may instead be attributed to a decrease in the utilization rate of certain inputs ( for example, labor hoarding or excess capacity).

Fluctuations in Productivity Growth Rates and Input Utilization in U.S. Manufacturing

This prediction also emerges in models that allow for labor hoarding and variable capital utilization rates (Burnside, Eichenbaum, and Rebelo, 1993 and Burnside and Eichenbaum, 1996).

How does an increase in government purchases affect the economy?

4) Theory provides at least three explanations for this business cycle "fact": procyclical technology shocks, increasing returns to scale, and labor hoarding.

Productivity gains during business cycles: what's normal?

Acyclical real wages are consistent with many different explanations of wage rigidity, and procyclical labor productivity is consistent with technology shocks or labor hoarding.

Out of Work: Unemployment and Government in Twentieth-Century America

Labor hoarding however cannot be adequately expressed by isoquants.

Slave labor as labor hoarding - input use inside the economic region of production

Firms that practice a relatively large degree of labor hoarding will naturally have more stable employment, and this model suggests that they would give larger price-cost markup estimates as well.

Imperfect competition and business cycles: an empirical investigation

They find that job security provisions and worker bargaining power interact with institutional factors and sectoral shocks to determine allocation, and the extent of labor hoarding.