a column by Franck Portier for VOX: CEPR’s Policy Portal
Business economists argue that the length of an expansion is a good indicator of when a recession will hit.
Using both parametric and non-parametric measures, this column finds strong support for the theory from post-WWII data on the US economy. The findings suggest there is good reason to expect a US recession in the next two years.
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Showing posts with label business_cycle. Show all posts
Showing posts with label business_cycle. Show all posts
Wednesday, 8 May 2019
Friday, 19 October 2018
First fired, first hired? Business cycles and immigrant labor market transitions
an article by Huanan Xu (Indiana University, South Bend, USA) published in IZA Journal of Development and Migration Volume 8 Article 19 (2018)
Abstract
Using individual-level Current Population Survey (CPS) data matched across adjacent months from 1996 to 2013, this paper examines immigrant-native differentials in labor market transitions to changes in the business cycle.
The paper captures economic fluctuations by measuring deviations in local demand from national economic circumstances and examines monthly transitions among employment, unemployment, and nonparticipation.
Immigrants are found to be first fired and first hired over the business cycle, and the aggregate unemployment gap is caused by immigrants’ higher rates in the unemployment entry flow. Although to some extent the gap can be explained by variation in the immigrant-native’s exposure to cycles across industry and occupation, the first fired and first hired pattern still holds.
Tests for heterogeneity show that low-skilled immigrants are more vulnerable to the business cycle. Tests of the structural changes from the 2007–2009 Great Recession show that since its start, there was a secular shift in the transition probabilities that would affect all workers negatively, but cyclical volatility was mitigated for immigrants in the post-Great Recession period.
JEL Classification: J15, J21, J23, J61, J63, J64
Full text (PDF 35pp)
Abstract
Using individual-level Current Population Survey (CPS) data matched across adjacent months from 1996 to 2013, this paper examines immigrant-native differentials in labor market transitions to changes in the business cycle.
The paper captures economic fluctuations by measuring deviations in local demand from national economic circumstances and examines monthly transitions among employment, unemployment, and nonparticipation.
Immigrants are found to be first fired and first hired over the business cycle, and the aggregate unemployment gap is caused by immigrants’ higher rates in the unemployment entry flow. Although to some extent the gap can be explained by variation in the immigrant-native’s exposure to cycles across industry and occupation, the first fired and first hired pattern still holds.
Tests for heterogeneity show that low-skilled immigrants are more vulnerable to the business cycle. Tests of the structural changes from the 2007–2009 Great Recession show that since its start, there was a secular shift in the transition probabilities that would affect all workers negatively, but cyclical volatility was mitigated for immigrants in the post-Great Recession period.
JEL Classification: J15, J21, J23, J61, J63, J64
Full text (PDF 35pp)
Tuesday, 6 February 2018
Confidence, uncertainty and macroeconomic fluctuations
a column by Laura Nowzohour and Livio Stracca for VOX: CEPR’s Policy Portal
At an intuitive level, economists and non-economists alike find it plausible that economic sentiment and economic developments are related. This column surveys recent theoretical and empirical work on the role of sentiment as a driver of the business cycle. Sentiment measures are found to be weakly correlated at the country level, but highly correlated across countries. Further, sentiment seems most closely correlated with economic and financial variables, and tends to be forward looking.
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At an intuitive level, economists and non-economists alike find it plausible that economic sentiment and economic developments are related. This column surveys recent theoretical and empirical work on the role of sentiment as a driver of the business cycle. Sentiment measures are found to be weakly correlated at the country level, but highly correlated across countries. Further, sentiment seems most closely correlated with economic and financial variables, and tends to be forward looking.
Continue reading
Saturday, 6 January 2018
Responsiveness of wives’ labour supply to husbands’ job loss
a column by Julia Bredtmann, Sebastian Otten and Christian Rulff for VOX: CEPR’s Policy Portal
Little is known about how unemployment shocks are absorbed within the household. This column uses longitudinal micro data for 28 European countries to investigate the effect of husbands’ job loss on wives’ labour supply. Overall, there is evidence that women increase their labour supply in response to their husband losing a job. However, the response varies over both the business cycle and across different welfare regimes.
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Little is known about how unemployment shocks are absorbed within the household. This column uses longitudinal micro data for 28 European countries to investigate the effect of husbands’ job loss on wives’ labour supply. Overall, there is evidence that women increase their labour supply in response to their husband losing a job. However, the response varies over both the business cycle and across different welfare regimes.
Continue reading
Thursday, 9 July 2015
The scarring effect of unemployment from the early '90s to the great recession
a research paper [No. 2015-05 March 2015] by Alberto Tumino for (Institute for Social and Economic Research, University of Essex)
Abstract
This paper addresses two issues of great importance in the current economic climate.
First, it analyses the extent to which unemployment experiences have a scarring effect on British men during the Great Recession.
Second, it provides an insight into the relation between true state dependence and the business cycle by investigating the role of local unemployment in affecting the persistence of unemployment incidence and by analysing the dynamics of unemployment scarring in the last two decades.
Our results support the presence of true state dependence both during the Great Recession and in the other two sub-periods analysed, the early 90s and early 2000s.
Moreover, we find evidence of a negative association between the scarring effect of unemployment and the business cycle. From a policy perspective, our findings imply that public interventions aimed at alleviating unemployment in the short term are also likely to have beneficial effects on longer term unemployment, especially during downturns.
JEL codes: J64, J60, J01, R23
Full text (PDF 44pp)
Abstract
This paper addresses two issues of great importance in the current economic climate.
First, it analyses the extent to which unemployment experiences have a scarring effect on British men during the Great Recession.
Second, it provides an insight into the relation between true state dependence and the business cycle by investigating the role of local unemployment in affecting the persistence of unemployment incidence and by analysing the dynamics of unemployment scarring in the last two decades.
Our results support the presence of true state dependence both during the Great Recession and in the other two sub-periods analysed, the early 90s and early 2000s.
Moreover, we find evidence of a negative association between the scarring effect of unemployment and the business cycle. From a policy perspective, our findings imply that public interventions aimed at alleviating unemployment in the short term are also likely to have beneficial effects on longer term unemployment, especially during downturns.
JEL codes: J64, J60, J01, R23
Full text (PDF 44pp)
Thursday, 2 September 2010
Disability, capacity for work and the business cycle: ...
an international perspective
an article by Hugo Benítez-Silva (SUNY-Stony Brook), Richard Disney (University of Nottingham) and Sergi Jiménez-Martín (Universitat Pompeu Fabra, Barcelona GSE, and FEDEA) published in Economic Policy Volume 25 Issue 63 (July 2010)
Summary
Important policy issues arise from the high and growing number of people claiming disability benefits for reasons of incapacity for work in OECD countries. Economic conditions play an important part in explaining both the stock of disability benefit claimants and inflows to and outflows from that stock. Employing a variety of cross-country and country-specific household panel data sets, as well as administrative data, we find strong evidence that local variations in unemployment have an important explanatory role for disability benefit receipt, with higher total enrolments, lower outflows from rolls and, often, higher inflows into disability rolls in regions and periods of above-average unemployment. In understanding the nature of the cyclical fluctuations and trends in disability it is important to distinguish between work disability and health disability. The former is likely to be influenced by economic conditions and welfare programmes while the latter evolves in a slower fashion with medical technology and demographic changes. There is little evidence of health disability being related to the business cycle, so cyclical variations are driven by work disability. The rise in unemployment due to the current global economic crisis is expected to increase the number of disability insurance claimants.
Hazel’s comment:
I think I need to read the full article to understand this.
OUCH! It’s an article based on an OECD paper published in September 2009 and the PDF is 68 pages. Maybe I’ll just skim it!
If you want to do the same online then go to http://www.oecd.org/dataoecd/21/57/44352512.pdf
an article by Hugo Benítez-Silva (SUNY-Stony Brook), Richard Disney (University of Nottingham) and Sergi Jiménez-Martín (Universitat Pompeu Fabra, Barcelona GSE, and FEDEA) published in Economic Policy Volume 25 Issue 63 (July 2010)
Summary
Important policy issues arise from the high and growing number of people claiming disability benefits for reasons of incapacity for work in OECD countries. Economic conditions play an important part in explaining both the stock of disability benefit claimants and inflows to and outflows from that stock. Employing a variety of cross-country and country-specific household panel data sets, as well as administrative data, we find strong evidence that local variations in unemployment have an important explanatory role for disability benefit receipt, with higher total enrolments, lower outflows from rolls and, often, higher inflows into disability rolls in regions and periods of above-average unemployment. In understanding the nature of the cyclical fluctuations and trends in disability it is important to distinguish between work disability and health disability. The former is likely to be influenced by economic conditions and welfare programmes while the latter evolves in a slower fashion with medical technology and demographic changes. There is little evidence of health disability being related to the business cycle, so cyclical variations are driven by work disability. The rise in unemployment due to the current global economic crisis is expected to increase the number of disability insurance claimants.
Hazel’s comment:
I think I need to read the full article to understand this.
OUCH! It’s an article based on an OECD paper published in September 2009 and the PDF is 68 pages. Maybe I’ll just skim it!
If you want to do the same online then go to http://www.oecd.org/dataoecd/21/57/44352512.pdf
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