IDEAS home Printed from https://ideas.repec.org/a/aen/journl/ej39-3-karaki.html
   My bibliography  Save this article

Oil Prices and State Unemployment Rates

Author

Listed:
  • Mohamad B. Karaki

Abstract

This paper studies the effect of oil price shocks on U.S. state-level unemployment rates. First, using a test of symmetry, I evaluate whether the relationship between oil prices and state unemployment rates is symmetric. I find no evidence against the null of symmetry after accounting for data mining. Second, I use a symmetric structural VAR model to analyze the effect of oil supply shocks, aggregate demand shocks and oil-specific demand shocks on state unemployment. I find that an adverse supply shock triggers increases in unemployment, whereas a positive aggregate demand shock reduces the unemployment rate across most U.S. states. I also show that oil-specific demand shocks have little effect on state unemployment. Finally, I dig into the historical contribution of the various oil shocks to the changes in state unemployment rates during the shale boom period. I find that aggregate demand shocks contributed the most to the change of unemployment.

Suggested Citation

  • Mohamad B. Karaki, 2018. "Oil Prices and State Unemployment Rates," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    • Handle: RePEc:aen:journl:ej39-3-karaki
    as

    Download full text from publisher

    File URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=3076
    Download Restriction: Access to full text is restricted to IAEE members and subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Moshiri, Saeed & Bakhshi Moghaddam, Mohsen, 2018. "The effects of oil price shocks in a federation; The case of interregional trade and labour migration," Energy Economics, Elsevier, vol. 75(C), pages 206-221.
    2. Peng Li & Yaofu Ouyang, 2023. "Oil price shocks and China’s consumer and entrepreneur sentiment: a Bayesian structural VAR approach," Empirical Economics, Springer, vol. 65(5), pages 2241-2271, November.
    3. Diab, Sara & Karaki, Mohamad B., 2023. "Do increases in gasoline prices cause higher food prices?," Energy Economics, Elsevier, vol. 127(PB).
    4. Xinheng Liu & Shuxian Li & Chengbo Fu & Xu Gong & Chen Fan, 2024. "The oil price plummeted in 2014–2015: Is there an effect on Chinese firms' labour investment?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 943-960, January.
    5. Herrera, Ana María & Karaki, Mohamad B. & Rangaraju, Sandeep Kumar, 2019. "Oil price shocks and U.S. economic activity," Energy Policy, Elsevier, vol. 129(C), pages 89-99.
    6. Chen, Shiu-Sheng & Huang, Shiangtsz & Lin, Tzu-Yu, 2022. "How do oil prices affect emerging market sovereign bond spreads?," Journal of International Money and Finance, Elsevier, vol. 128(C).
    7. Iman Cheratian & Mohammad Reza Farzanegan & Saleh Goltabar, 2019. "Oil Price Shocks and Unemployment Rate: New Evidence from the MENA Region," MAGKS Papers on Economics 201931, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Koirala, Niraj Prasad & Ma, Xiaohan, 2020. "Oil price uncertainty and U.S. employment growth," Energy Economics, Elsevier, vol. 91(C).
    9. Moghaddam, Mohsen Bakhshi & Lloyd-Ellis, Huw, 2022. "Heterogeneous effects of oil price fluctuations: Evidence from a nonparametric panel data model in Canada," Energy Economics, Elsevier, vol. 110(C).
    10. Mohamad B. Karaki, 2018. "Asymmetries In The Responses Of Regional Job Flows To Oil Price Shocks," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1827-1845, July.
    11. Isiaka Akande Raifu & Alarudeen Aminu & Abiodun O. Folawewo, 2020. "Investigating the relationship between changes in oil prices and unemployment rate in Nigeria: linear and nonlinear autoregressive distributed lag approaches," Future Business Journal, Springer, vol. 6(1), pages 1-18, December.
    12. Wang, Kai-Hua & Liu, Lu & Li, Xin & Oana-Ramona, Lobonţ, 2022. "Do oil price shocks drive unemployment? Evidence from Russia and Canada," Energy, Elsevier, vol. 253(C).
    13. Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2020. "Oil Price and Energy Depletion Nexus in GCC Countries: Asymmetry Analyses," Energies, MDPI, vol. 13(12), pages 1-13, June.
    14. Kandemir Kocaaslan, Ozge, 2019. "Oil price uncertainty and unemployment," Energy Economics, Elsevier, vol. 81(C), pages 577-583.
    15. Zhang, Xi-Xi & Liu, Lu, 2020. "The time-varying causal relationship between oil price and unemployment: Evidence from the U.S. and China (EGY 118745)," Energy, Elsevier, vol. 212(C).
    16. Guy Assaker & Wassim Shahin, 2022. "What Drives Faculty Publication Citations in the Business Field? Empirical Results from an AACSB Middle Eastern Institution," Publications, MDPI, vol. 10(4), pages 1-29, November.
    17. Mohamad B. Karaki, 2020. "Monetary shocks and job flows: evidence from disaggregated data," Empirical Economics, Springer, vol. 58(6), pages 2911-2936, June.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aen:journl:ej39-3-karaki. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David Williams (email available below). General contact details of provider: https://edirc.repec.org/data/iaeeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.