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"Excess Labor and the Business
Cycle," The American Economic
Review, March 1985, 239-245.
pdf file (547KB).
This paper was written in reaction to the empirical study of 168 U.S.
manufacturing plants of Jon Fay and James Medoff, "Labor and Output
Over the Business Cycle: Some Direct Evidence," American Economic
Review, 1985, 75, 638-655. The Fay and Medoff results seem
consistent with my aggregate estimates of excess labor, which is what this
paper argues. An update of some of the results in this paper is in
1994#2, pages 50-52.