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Monetary Policy, Labor Market, and Sectoral Heterogeneity

Author

Listed:
  • Aarti Singh
  • Jacek Suda
  • Anastasia Zervou

Abstract

We study the effects of monetary policy on the labor market across different sectors. We find that the employment response is stronger for firms in manufacturing and construction relative to firms in services. The result also holds within small and large firms. Moreover, within sectors, the employment growth in large firms responds more than it does in small firms after monetary contractions; it does so less after monetary expansions. Finally, we find that the differences in employment growth between small and large firms are greater for firms in the manufacturing and construction sectors compared to those in the service sector.

Suggested Citation

  • Aarti Singh & Jacek Suda & Anastasia Zervou, 2022. "Monetary Policy, Labor Market, and Sectoral Heterogeneity," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 491-495, May.
    • Handle: RePEc:aea:apandp:v:112:y:2022:p:491-95
    DOI: 10.1257/pandp.20221095
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    Citations

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    Cited by:

    1. Madeira, Carlos & Salazar, Leonardo, 2023. "The impact of monetary policy on a labor market with heterogeneous workers: The case of Chile," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 4(2).
    2. Singh, Aarti & Suda, Jacek & Zervou, Anastasia, 2021. "Heterogeneous labour market response to monetary policy: small versus large firms," Working Papers 2021-07, University of Sydney, School of Economics, revised Nov 2021.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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