Macroeconomic Shocks And Local Labor Market Outcomes In The Short And Long Run
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Macroeconomic Shocks And Local Labor Market Outcomes In The Short And Long Run
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Author : Gaetano Basso
language : en
Publisher:
Release Date : 2016
Macroeconomic Shocks And Local Labor Market Outcomes In The Short And Long Run written by Gaetano Basso and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This dissertation analyzes how local labor markets respond to macroeconomic shocks, such as changes in the global price of commodities or international migration flows, based on their predetermined characteristics. I further investigate how short-run elasticities of employment, population and earnings to such economic shocks differ from the long-run ones. Last, I analyze which econometrics methods are best suited to estimate such responses over time. Chapter 1 analyzes how resource-rich local labor markets adjust to large swings in the global price of natural resources. I provide a novel dynamic analysis of the consequences of natural resource price cycles by measuring the economic performance of oil-rich areas in the U.S. over three decades (1970-2000). I find that the consequences of booms are different from the consequences of busts. Oil-rich economies adjust quickly to the new long-run equilibrium during booms by increasing local employment, nominal wages and income from capital. Migration responses are limited, which is consistent with the small real wage gains that occur because of contemporaneous large increases in local prices. The negative impact of a bust is borne locally through higher nonemployment and exacerbated by a large reduction in human capital investments observed during the preceding boom. The adverse long-run effects of boom-bust cycles mainly depress the lower end of the income distribution. Chapter 2, joint with Giovanni Peri, analyzes important correlations between immigration and labor market outcomes of native workers in the US. Using data on local labor markets, states and regions we first look at simple correlations and then we use regression analysis with an increasing number of controls for observed and unobserved factors. We review the potential methods to separate the part of this correlation that captures the causal link from immigrants to native labor outcomes and we show estimates obtained with 2SLS method using the popular shift-share instrument. One fact emerging from all the specifications is that the net growth of immigrant labor has a zero to positive correlation with changes in native wages and native employment, in aggregate and by skill group. We review the literature on the channels and the mechanisms that allow local economies to absorb immigrants with no negative (and possibly positive) impact on the labor demand for natives. Finally, Chapter 3 analyzes the identification of treatment effects delayed in time. Applied economists are increasingly interested in recovering the causal effect of a treatment over time, although the methods they use often ignore that outcomes and regressors may have internal propagation dynamics. Typical applications include geographic unit-by-time panel data in nonexperimental settings, such those analyzed in Chapters 1 and 2. In those contexts the elasticities of labor market outcomes to macro shocks in the short run may differ substantially from those in the long run. This chapter illustrates by means of two simple Monte Carlo simulations that traditional regression methods fail to recover such delayed effects. I find that distributed lags models in panel settings are substantially biased unless under trivial conditions with no internal propagation dynamics in both outcomes and regressors. In contrast, local projections methods perform significantly better. Most importantly, they can easily accommodate Arellano and Bond (1991) instruments thus reducing the bias further even in the presence of lagged dependent variables.
The Effect Of Labor Market Shocks Across The Life Cycle
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Author : Kjell G. Salvanes
language : en
Publisher:
Release Date : 2022
The Effect Of Labor Market Shocks Across The Life Cycle written by Kjell G. Salvanes and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with Human capital categories.
Adverse economic shocks occur frequently and may cause individuals to reevaluate key life decisions in ways that have lasting consequences for themselves and the broader economy. These life decisions are fundamentally tied to specific periods of an individual's career, and economic shocks may therefore have substantially different impacts on individuals -- and the broader economy -- depending on when they occur. We exploit mass layoffs and establishment closures to examine the impact of adverse shocks across the life cycle on labor market outcomes and major life decisions: human capital investment, mobility, family structure, and retirement. Our results reveal substantial heterogeneity on labor market effects and life decisions in response to economic shocks across the life cycle. Individuals at the beginning of their careers invest in human capital and relocate to new local labor markets, individuals in the middle of their careers reduce fertility and adjust family formation decisions, and individuals at the end of their careers permanently exit the workforce and retire. As a consequence of the differential interactions between economic shocks and life decisions, the very long-term career implications of labor shocks vary considerably depending on when the shock occurs. We also document important heterogeneity across genders and education levels, both with respect to the immediate impact as well as the sum total of all these effects in the very long-term. We conclude that effects of adverse labor shocks are both more varied and more extensive than has previously been recognized, and that focusing on average effects among workers across the life cycle misses a great deal.
Comparative Analysis Of Labor Market Outcomes
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Author : Giuseppe Bertola
language : en
Publisher:
Release Date : 2001
Comparative Analysis Of Labor Market Outcomes written by Giuseppe Bertola and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Economics categories.
We analyze a 1960-96 panel of OECD countries to explain why the US moved from relatively high to relatively low unemployment over the last three decades. We find that while macroeconomic and demographic shocks and changing labor market institutions explain a modest portion of this change, the interaction of these shocks and labor market institutions is the most important factor explaining the shift in US relative unemployment. Our finding of the central importance of these interactions is consistent with Blanchard and Wolfers (2000). We also show that, controlling for country- and time-specific effects, high employment is associated with low wage levels and high levels of wage inequality. These findings suggest that US relative unemployment has fallen in recent years in part because its more flexible labor market institutions allow shocks to affect real and relative wages to a greater degree than is true in other countries. Disaggregating, we find that the employment of both younger and older people fell sharply in other countries relative to the United States since the 1970s, with much smaller differences in outcomes among the prime-aged. In the late 1990s, the US had lower unemployment than our models predict, suggesting exceptionally favorable recent US experience
How Effects Of Local Labor Demand Shocks Vary With Local Labor Market Conditions
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Author : Timothy J. Bartik
language : en
Publisher:
Release Date : 2014
How Effects Of Local Labor Demand Shocks Vary With Local Labor Market Conditions written by Timothy J. Bartik and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Job creation categories.
This paper estimates how effects of shocks to local labor demand on local labor market outcomes vary with initial local economic conditions. The data are on U.S. metro areas from 1979 to 2011. The paper finds that demand shocks to local job growth have greater effects in reducing local unemployment rates if the local economy is initially depressed than if the local economy is booming. Demand shocks have greater effects on local wage rates if the local unemployment rate is initially low, but lesser effects if local job growth is initially high. These different effects of local demand shocks imply that social benefits of adding jobs are two to three times greater per job in more depressed local labor markets, compared to more booming local labor markets.
Handbook Of Labor Economics
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Author : Orley Ashenfelter
language : en
Publisher: Elsevier
Release Date : 1999-11-18
Handbook Of Labor Economics written by Orley Ashenfelter and has been published by Elsevier this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999-11-18 with Business & Economics categories.
A guide to the continually evolving field of labour economics.
The Labor Market And Economic Adjustment
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Author : Pierre-Richard Agénor
language : en
Publisher: International Monetary Fund
Release Date : 1995-11-01
The Labor Market And Economic Adjustment written by Pierre-Richard Agénor and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1995-11-01 with Business & Economics categories.
This paper examines the role of the labor market in the transmission process of adjustment policies in developing countries. It begins by reviewing the recent evidence regarding the functioning of these markets. It then studies the implications of wage inertia, nominal contracts, labor market segmentation, and impediments to labor mobility for stabilization policies. The effect of labor market reforms on economic flexibility and the channels through which labor market imperfections alter the effects of structural adjustment measures are discussed next. The last part of the paper identifies a variety of issues that may require further investigation, such as the link between changes in relative wages and the distributional effects of adjustment policies.
Hysteresis And Business Cycles
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Author : Ms.Valerie Cerra
language : en
Publisher: International Monetary Fund
Release Date : 2020-05-29
Hysteresis And Business Cycles written by Ms.Valerie Cerra and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-05-29 with Business & Economics categories.
Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Labor Market Institutions Around The World
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Author : Richard Barry Freeman
language : en
Publisher:
Release Date : 2007
Labor Market Institutions Around The World written by Richard Barry Freeman and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Economic development categories.
The paper documents the large cross-country differences in labor institutions that make them a candidate explanatory factor for the divergent economic performance of countries and reviews what economists have learned about the effects of these institutions on economic outcomes. It identifies three ways in which institutions affect economic performance: by altering incentives, by facilitating efficient bargaining, and by increasing information, communication, and trust. The evidence shows that labor institutions reduce the dispersion of earnings and income inequality, which alters incentives, but finds equivocal effects on other aggregate outcomes, such as employment and unemployment. Given weaknesses in the cross-country data on which most studies focus, the paper argues for increased use of micro-data, simulations, and experiments to illuminate how labor institutions operate and affect outcomes.
Gender And Employment In The Covid 19 Recession Evidence On She Cessions
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Author : Mr. John C Bluedorn
language : en
Publisher: International Monetary Fund
Release Date : 2021-03-31
Gender And Employment In The Covid 19 Recession Evidence On She Cessions written by Mr. John C Bluedorn and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-03-31 with Business & Economics categories.
Early evidence on the pandemic’s effects pointed to women’s employment falling disproportionately, leading observers to call a “she-cession.” This paper documents the extent and persistence of this phenomenon in a quarterly sample of 38 advanced and emerging market economies. We show that there is a large degree of heterogeneity across countries, with over half to two-thirds exhibiting larger declines in women’s than men’s employment rates. These gender differences in COVID-19’s effects are typically short-lived, lasting only a quarter or two on average. We also show that she-cessions are strongly related to COVID-19’s impacts on gender shares in employment within sectors.
Globalization And Poverty
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Author : Ann Harrison
language : en
Publisher: University of Chicago Press
Release Date : 2007-11-01
Globalization And Poverty written by Ann Harrison and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-11-01 with Business & Economics categories.
Over the past two decades, the percentage of the world’s population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization’s perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. Globalization and Poverty bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the contributors show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further their respective arguments. Globalization and Poverty provides the more nuanced understanding necessary to move that debate beyond the slogans.