Trends in U.S. Hours and the Labor Wedge

Cociuba, Simona E.; Ueberfeldt, Alexander

doi:10.24149/gwp53

Cited by 7 publications

(5 citation statements)

References 28 publications

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“…The Bureau of Labor Statistics (BLS) has seasonally unadjusted monthly data for average hours at work disaggregated by men and women from June 1976. 2 Following Cociuba et al (2009) the average, monthly data is transformed into a seasonally adjusted, aggregate quarterly series. This method takes into account monthly outliers, which could be due to a holiday falling on a reference week leading to an under-reporting hours worked.…”

Section: Empirical Evidencementioning

confidence: 99%

“…In order to provide evidence for the model specification, I first show that aggregate hours varies by gender. I use average hours for non-agricultural industries separated by gender from the Current Population Survey (CPS) transforming each series into a quarterly series of aggregate hours carefully taking into account possible outliers and seasonality issues following Cociuba et al (2009) . I find that the volatility of the cyclical component is greater for men than women using a sample from 1976Q3 to 2015Q2; this result is robust to different filtering methods.…”

Section: Introductionmentioning

confidence: 99%

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Gender differences in the volatility of work hours and labor demand

Guisinger

2020

Journal of Macroeconomics

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This paper examines the role of heterogeneity in a real business cycle model, which traditionally has not fully captured the relative volatility of hours to output. Men and women have different cyclical volatilities in hours worked, which is robust to different filtering methods. This empirical regularity is used to motivate a standard RBC model augmented to allow for two different agents following Jaimovich et al. (2013). These two agents have identical utility functions, but face different elasticities of labor demand due to their different complementarities with capital. These estimated elasticities find that women are more complementary to capital. The calibrated model generates the cyclical volatility of work hours by gender and for the total hours worked that matches the U.S. data better than the traditional representative agent model. I then explore other extensions to this model including investigating the stability of the estimated labor demand elasticities and allowing for various Frisch elasticities of labor supply. This paper demonstrates that allowing for even broad levels of heterogeneity in a simple framework can increase the model’s tractability with the data. Since gender is important to explain U.S. business cycle dynamics, we need to carefully consider heterogeneity when analyzing counter-cyclical economic policy, as it may not have symmetric effects across assorted groups.

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Section: Empirical Evidencementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Gender differences in the volatility of work hours and labor demand

Guisinger

2020

Journal of Macroeconomics

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“…Shaded areas indicate NBER recession dates). The labor wedge seems to have a low frequency movement, which might be explained by changes in the taxes (see for instance, Ohanian, Rogerson and Ra¤o, 2008) or changes in the composition of the workforce and the resulting imperfect household aggregation over-time (Cociuba and Ueberfeldt, 2010). However, at the business cycle frequency, there is a lot of variation in the measured labor wedge that is highly unlikely to be explained by high-frequency changes in labor tax.…”

Section: The Prototype Real Business Cycle Modelmentioning

confidence: 99%

Search Frictions and the Labor Wedge

Pescatori

Tasci

2011

Working Paper (Federal Reserve Bank of Cleveland)

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.clevelandfed.org/research. Terms of use: Documents in Working Paper 11-11April 2011 Search Frictions and the Labor Wedge Andrea Pescatori and Murat TasciThis paper assesses whether labor market frictions, in the form of searching and matching, can help explain movements in the labor wedge-the gap between the marginal rate of substitution (MRS) and the marginal productivity of labor in a perfectly competitive business cycle model. Results suggest that those frictions are not able to explain fl uctuations in the labor wedge, per se. However, the introduction of extensive and intensive margin shows that measuring the MRS in terms of total hours artifi cially introduces procyclicality in the MRS. When the MRS is correctly measured in terms of hours per worker, the labor wedge obtained is less variable than the one of the perfectly competitive model. A Frisch elasticity of 2.8, as in most macro models, implies a 20 percent decline in the variability of the labor wedge. A Frisch elasticity closer to micro estimates implies an even higher reduction. Finally, we show that it is possible to measure a strongly procyclical labor wedge as in CKM (2007) even if the actual data generating process does not have any labor wedge but has search frictions that allow for movements in both labor margins.

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“…While we do not attempt to draw causal implication as in CKM, we analyze the statistical properties of the labor wedge in relation to business cycles. Figure (1 Ohanian, Rogerson and Ra¤o, 2008) or changes in the composition of the workforce and the resulting imperfect household aggregation over-time (Cociuba and Ueberfeldt, 2010). However, at the business cycle frequency, there is a lot of variation in the measured labor wedge that is highly unlikely to be explained by high-frequency changes in labor tax.…”

Section: The Prototype Real Business Cycle Modelmentioning

confidence: 99%

Search Frictions and the Labor Wedge

Tasci

Pescatori²

2011

IMF Working Papers

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This paper shows that labor market search frictions do not explain fluctuations in the labor wedge per se. However, the introduction of extensive and intensive margin clarifies that measuring the MRS in terms of total hours artificially introduces procyclicality in the MRS. When the MRS is correctly measured in terms of hours per worker, the labor wedge obtained is less variable than the one of the competitive model. Finally, we show that it is possible to measure a strongly procyclical labor wedge when the actual data generating process is a search model that allows for movements in both margins. JEL Classification Numbers:E24; E32; J64

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Trends in U.S. Hours and the Labor Wedge

Cited by 7 publications

References 28 publications

Gender differences in the volatility of work hours and labor demand

Gender differences in the volatility of work hours and labor demand

Search Frictions and the Labor Wedge

Search Frictions and the Labor Wedge

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