Employment comovements at the sectoral level over the business cycle

Cassou, Steven P.; Vázquez, Jesús

doi:10.1007/s00181-013-0720-7

Cited by 3 publications

(2 citation statements)

References 21 publications

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“…Both papers use data on vacancies to rule out the possibility that cyclical fluctuations are generated by reallocation of resources across sectors, rather than an aggregate shock. Cassou and Vazquez (2009) find that employment in six out of the ten major private sectors demonstrate no leads or lags relative to each other. They interpret this finding as supportive of a unified shock.…”

Section: Shocksmentioning

confidence: 99%

Why does employment in all major sectors move together over the business cycle?

Yedid‐Levi

2016

Review of Economic Dynamics

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In recessions, employment falls in all major sectors. Positive correlation of employment across sectors is a puzzle, because a standard two-sector business-cycle model driven by aggregate productivity shocks predicts negative correlation of total hours of work in the consumption-goods sector and the investment-goods sector. I start from the observation that most of the variability of total hours worked takes the form of variations in the number of workers. Hours per employed worker is only a secondary source of variation. The extensive margin is therefore critical in understanding the positive correlation of sectoral labor market variables, yet neglected by existing studies. This paper advances the literature on cross-sectoral correlation of employment by making unemployment an explicit feature of the model. I construct a novel two sector model with search and matching friction, capital adjustment costs, and partial wage stickiness. The model explains the positive cross-sectoral correlation through movements of workers in both sectors into and out of unemployment.

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Section: Shocksmentioning

confidence: 99%

Why does employment in all major sectors move together over the business cycle?

Yedid‐Levi

2016

Review of Economic Dynamics

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“…There are only a handful of studies (e.g. Clark 1998;Stock and Watson 1999;Horensten 2000;Kim and Kim 2006;Malysheva and Sarte 2009;Cassou and Vazquez 2014) that examine the cyclical behavior of sectoral employment.…”

Section: Introductionmentioning

confidence: 99%

A note on the cyclical behavior of sectoral employment in the U.S.

Nath

2016

Economic Analysis and Policy

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Using data for 14 major sectors of the U.S. private economy and the government from 1958 to 2014, this note examines the cyclical behavior of sectoral employment. In particular, it investigates if relative volatility and comovement of the cyclical component of sectoral employment with real GDP have changed over time. The cyclical components are extracted using the Hodrick-Prescott (H-P) filter and changes in cyclical properties are detected using rolling standard deviations and rolling correlations. The analysis suggests that these properties have changed substantially for a number of service sectors since the early 1980s. In particular, wholesale and retail trade, transportation and utility, information, financial activities, and professional and business services have experienced significant increases in relative volatility. Furthermore, while the positive correlation between the cyclical components of employment and real GDP has become stronger for wholesale trade, transportation and utility, financial activities, and professional and business services, it has become weaker for information services, leisure and hospitality, and other services. Finally, education and health sector employment has switched from being procyclical to countercyclical. Recognizing these changes is important and useful for future research on business cycle behavior of the labor market in the U.S. and for policy formulation.

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Dynamics of Sectoral Business Cycle Comovement

Sandqvist

2015

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Employment comovements at the sectoral level over the business cycle

Cited by 3 publications

References 21 publications

Why does employment in all major sectors move together over the business cycle?

Why does employment in all major sectors move together over the business cycle?

A note on the cyclical behavior of sectoral employment in the U.S.

Dynamics of Sectoral Business Cycle Comovement

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