LABOR HOARDING IN A DISEQUILIBRIUM MODEL OF THE DUTCH LABOR-MARKET

This paper presents a method to integrate labour hoarding into a diseq uilibrium model of the labour market. Disequilibrium indicators for th e labour market that include labour hoarding are constructed. These in dicators, being important determinants of policy multipliers with resp ect to employment, are found to be less volatile than the correspondin g disequilibrium indicators for the goods market which are available f rom business surveys. The lower volatility reflects the role of labour hoarding as a buffer between actual and efficient employment levels. Our results indicate that labour hoarding in Dutch enterprises ranges from a minimum of 0.5 per cent of employment in early 1985 to a maximu m of 7.0 per cent in 1975. Furthermore, the paper pays special attenti on to the modelling of mismatch unemployment and to the simulation res ults of an empirical disequilibrium macromodel of the Dutch economy.