Labor and the market value of the firm

What role does labor play in a firm’s market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin to investment in capital and that the two interact, with the interaction being a crucial determinant of the time series behavior of market value. We use aggregate U.S. corporate sector data to estimate firms' optimal hiring and investment decisions and the consequences for firms' value. The model generates a good fit of the data. We decompose the estimated market value, thereby quantifying the link between firms' value and gross hiring flows, employment, gross investment flows, and physical capital. We find that a conventional specification -- quadratic adjustment costs for capital and no hiring costs -- performs poorly. Hiring and investment flows, unlike employment and capital stocks, are volatile and both are essential to account for market value volatility. A key result is that firms' value embodies the value of hiring and investment over and above the capital stock

Labor and the Market Value of the Firm

What role does labor play in a firm's market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin to investment in capital and that the two interact, with the interaction being a crucial determinant of the time series behavior of market value. We use aggregate U.S. corporate sector data to estimate firms' optimal hiring and investment decisions and the consequences for firms' value. The model generates a good fit of the data. We decompose the estimated market value, thereby quantifying the link between firms' value and gross hiring flows, employment, gross investment flows, and physical capital. We find that a conventional specification -- quadratic adjustment costs for capital and no hiring costs -- performs poorly. Hiring and investment flows, unlike employment and capital stocks, are volatile and both are essential to account for market value volatility. A key result is that firms' value embodies the value of hiring and investment over and above the capital stock.production-based asset pricing, labor market frictions, gross flows, Q-model, GMM

Women's Hours of Market Work in Germany : The Role of Parental Leave

This paper investigates trends and changes in the structural composition of women?s weekly market hours worked in former West-Germany using aggregate time-series data from the German micro census from 1957 until 2002. Aggregate weekly hours worked per workingage woman are decomposed into hours worked per employee – the intensive margin of adjustment – and the employment-to-population (EP-) ratio – the extensive margin. The decomposition is performed by women?s marital status, their age, and whether or not young children are present. The main results are that since the mid 1970s, the EP-ratio has steadily risen among female employees of all marital statuses whereas the weekly hours worked per female employee have declined. These changes have been the most distinct among married women with young children. The paper attributes much of the observed changes for married women to institutional modifications in the federal legislation governing parental leave which have occurred since 1986

Labor and the Market Value of the Firm

What role does labor play in firms? market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin to investment in capital and that the two interact, with the interaction being a crucial determinant of market value behavior. We use aggregate U.S. corporate sector data to estimate firms? optimal hiring and investment decisions and the consequences for firms? value. We then decompose this value, thereby quantifying the link between firms? market value and gross hiring flows, employment, gross investment and physical capital. We find that a conventional specification – quadratic adjustment costs for capital and no hiring costs – performs poorly. Rather hiring and investment flows, unlike employment and capital stocks, are volatile and both are essential to account for market volatility. A key result is that firms? value embodies the value of hiring and investment over and above the capital stock

Aggregation and Labor Supply Elasticities

The aggregate Frisch elasticity of labor supply has played a key role in business cycle analysis. This paper develops a statistical aggregation procedure which allows for worker heterogeneity in observables and unobservables and is applicable to an individual labor supply function with non-employment as a possible outcome. Performing a thought experiment in which all offered or paid wages are subject to an unanticipated temporary change, we can derive an analytical expression for the aggregate Frisch elasticity and illustrate its main components: (i) the intensive and extensive adjustment of hours worked, (ii) the extensive adjustment of wages, and (iii) the aggregate employment rate. We use individual-specific data from the German Socio-Economic Panel (SOEP) for males at working-age in order to quantify each component. This data base provides indirect evidence on non-employed workers' reservation wages. We use this variable in conjunction with a two-step conditional density estimator to retrieve the extensive adjustment of hours worked and wages paid. The intensive hours' adjustment follows from estimating a conventional panel data model of individual hours worked. Our estimated aggregate Frisch elasticity varies between .63 and .70. These results are sensitive to the assumed nature of wage changes

Struktur und Perspektiven der Wirtschaft Schleswig-Holsteins

Das Institut für Weltwirtschaft ist im Frühjahr 1989 von der Schleswig-Holsteinischen Landesregierung beauftragt worden, für die Denkfabrik des Ministerpräsidenten eine Studie über die Struktur und die -Entwicklungsperspektiven der Wirtschaft Schleswig-Holsteins durchzuführen. Aufgabe dieser Untersuchung war es, die wirtschaftliche Entwicklung des Landes in den beiden vergangenen Jahrzehnten sowie deren wichtigste Bestimmungsfaktoren zu analysieren. Zu diesem Zweck sollten insbesondere die bisherigen strukturellen Veränderungen im produzierenden Gewerbe und im Dienstleistungssektor herausgearbeitet sowie eine Reihe von Standortfaktoren, die für die Investitionsentscheidungen und für die Wettbewerbsfähigkeit der Unternehmen mit bestimmend sind, interregional verglichen werden. Im Vordergrund stand die Frage, ob sich die von anderen Bundesländern abweichende Einkommens- und Beschäftigungsentwicklung Schleswig-Holsteins auf strukturelle Faktoren und/oder auf die gegebenen Standortbedingungen für die Unternehmen zurückführen läßt. In einem weiteren Teil der Studie sollten die mittelfristigen Entwicklungsperspektiven für die Wirtschaft Schleswig-Holsteins aufgezeigt werden. Dazu ist versucht worden, die Chancen und Risiken der künftigen wirtschaftlichen Entwicklung des Landes sowohl unter Status-quo-Bedingungen als auch im Hinblick auf die Wirkungen, die von den Maßnahmen zur Vollendung des EG-Binnenmarktes ausgehen könnten, darzulegen. Da die Studie Ende 1989 abgeschlossen wurde, konnte auf die Integration der DDR-Wirtschaft und die marktwirtschaftliche Öffnung der RWG-Länder nicht eingegangen werden

Regulierungen auf dem Arbeitsmarkt der Bundesrepublik.

Arbeitsmarktpolitik; Arbeitsrecht; Regulierung; Deregulierung; Deutschland; Industriestaaten;

Functional cure and long-term survival in multiple myeloma: how to challenge the previously impossible

Multiple myeloma (MM) is a heterogeneous disease with survival ranging from months to decades. The goal of ‘cure’ remains elusive for most patients, but has been shown to be possible, with durable remission and a transition to a plateau phase (analogous to monoclonal gammopathy of uncertain significance/smoldering Myeloma (MGUS/SMM)). Two representative cases set the stage to illustrate how this might be possible and what still needs to be determined to achieve functional disease control over a prolonged period. Several developments have emerged, such as improved diagnostics including the definitions and use of SLiM-CRAB criteria and MRD with whole genome- /single-cell-sequencing as well as other correlates to better understand disease biology. These advances enable earlier detection, more accurate risk stratification and improved personalized treatment strategies by facilitating analysis of genetic alterations and clonal heterogeneity. Whole genome sequencing may also identify driver mutations and modes of resistance to targets like immunotherapies (IOs) as well as other targeted therapies. Today, induction with a CD38 antibody (CD38mAb), proteasome inhibitor, immunomodulatory drug, and dexamethasone, potentially followed by ASCT and lenalidomide maintenance, can be considered standard of care for transplant-eligible (TE) newly diagnosed (NDMM) patients. Whether prolonged disease control and functional cure can be achieved in non-transplant eligible (NTE) patients is currently emerging as a distinct possibility: data from phase III trials that incorporate a CD38mAb into the treatment of NTE NDMM patients demonstrate impressive MRD negativity rates that appear sustained over several years. While the long-term durability of CAR-Ts, bi-specific antibodies and other IOs are evaluated, several clinical trials are now investigating their role in frontline treatment for TE and NTE patients. These will address whether CAR-Ts will replace ASCT and whether such IOs will represent a truly curative option. We conclude that whilst cure remains elusive, the concept of operational or functional cure provides a new benchmark to strive for and is an emerging area of active and potentially achievable clinical research for MM