Advanced Search
MyIDEAS: Login

Hysteresis Hypothesis in Job Creation and Destruction: Evidence from the U.S

Contents:

Author Info

  • De-Chih Liu

    (Department of Industrial Economics, TamKang University)

Registered author(s):

    Abstract

    We employ the Im et al. (2005) and the Bai and Carrion-i-Silvestre (2009) tests of panel based unit root types to investigate the hysteresis hypothesis in job creation and destruction using U.S. state-level data. Although the conventional individual unit tests fail to reject the unit root for some of the states job creation and destruction rates, the results based on two panel-based unit root tests indicate that the hysteresis hypothesis in job creation and destruction can clearly be rejected. Our findings suggest that given sufficient time, the job creation and destruction rates will return to their previous paths.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.aeconf.net/Articles/Nov2011/aef120208.pdf
    Download Restriction: no

    File URL: http://down.aefweb.net/AefArticles/aef120208.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Society for AEF in its journal Annals of Economics and Finance.

    Volume (Year): 12 (2011)
    Issue (Month): 2 (November)
    Pages: 389-409

    as in new window
    Handle: RePEc:cuf:journl:y:2011:v:12:i:2:p:389-409

    Contact details of provider:
    Web page: http://www.aeconf.net/
    More information through EDIRC

    Related research

    Keywords: Hysteresis hypothesis; Job creation; Job destruction;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Perron, P. & Bai, J., 1995. "Estimating and Testing Linear Models with Multiple Structural Changes," Cahiers de recherche 9552, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    2. Diego Romero-Ávila & Carlos Usabiaga, 2007. "Unit Root Tests, Persistence, and the Unemployment Rate of The U.S. States," Southern Economic Journal, Southern Economic Association, vol. 73(3), pages 698–716, January.
    3. Kyung-So Im & Junsoo Lee & Margie Tieslau, 2005. "Panel LM Unit-root Tests with Level Shifts," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(3), pages 393-419, 06.
    4. Haoming Liu & Yi Wen & Lijing Zhu, 2007. "Uniform Working Hours and Structural Unemployment," Annals of Economics and Finance, Society for AEF, vol. 8(1), pages 113-136, May.
    5. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    6. Jushan Bai & Josep Llu�s Carrion-I-Silvestre, 2009. "Structural Changes, Common Stochastic Trends, and Unit Roots in Panel Data," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 471-501.
    7. Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues 91-5, Federal Reserve Bank of Chicago.
    8. Serena Ng & Pierre Perron, 2001. "PPP May not Hold After all: A Further Investigation," Economics Working Paper Archive 466, The Johns Hopkins University,Department of Economics.
    9. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Working Papers 1950, National Bureau of Economic Research, Inc.
    10. Azmat, Ghazala & Güell, Maia & Manning, Alan, 2004. "Gender Gaps in Unemployment Rates in OECD Countries," CEPR Discussion Papers 4307, C.E.P.R. Discussion Papers.
    11. Edmund S. Phelps, 1968. "Money-Wage Dynamics and Labor-Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 76, pages 678.
    12. Junsoo Lee & Mark C. Strazicich, 2013. "Minimum LM unit root test with one structural break," Economics Bulletin, AccessEcon, vol. 33(4), pages 2483-2492.
    13. Salah A. Nusair, 2006. "Real Interest Rate Parity: Evidence from Industrialized Countries," Annals of Economics and Finance, Society for AEF, vol. 7(2), pages 425-457, November.
    14. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    15. L.A. Gil-Alanaa, 2007. "Testing The Existence of Multiple Cycles in Financial and Economic Time Series," Annals of Economics and Finance, Society for AEF, vol. 8(1), pages 1-20, May.
    16. Perron, P, 1988. "The Great Crash, The Oil Price Shock And The Unit Root Hypothesis," Papers 338, Princeton, Department of Economics - Econometric Research Program.
    17. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
    18. Blanchard, Olivier & Jimeno, Juan F, 1995. "Structural Unemployment: Spain versus Portugal," American Economic Review, American Economic Association, vol. 85(2), pages 212-18, May.
    19. Nicolaas Groenewold & Sam Hak Kan Tang, 2004. "The asian financial crisis and the natural rate of unemployment: Estimates from a structural var for the newly industrializing economies of asia," Pacific Economic Review, Wiley Blackwell, vol. 9(1), pages 45-64, 02.
    20. Peter S. Sephton, 2009. "Persistence in U.S. State Unemployment Rates," Southern Economic Journal, Southern Economic Association, vol. 76(2), pages 458-466, October.
    21. David H. Papell & Christian J. Murray & Hala Ghiblawi, 2000. "The Structure of Unemployment," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 309-315, May.
    22. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
    23. Roed, Knut, 1997. " Hysteresis in Unemployment," Journal of Economic Surveys, Wiley Blackwell, vol. 11(4), pages 389-418, December.
    24. Thomas J. Cunningham, 1994. "Review essay on Structural Slumps: the Modern Equilibrium Theory of Unemployment, Interest, and Assets by Edmund S. Phelps, 1994," Economic Review, Federal Reserve Bank of Atlanta, issue Nov, pages 30-33.
    25. Groenewold, Nicolaas & Hagger, A J, 1998. "The Natural Unemployment Rate in Australia since the Seventies," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 24-35, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:cuf:journl:y:2011:v:12:i:2:p:389-409. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Qiang Gao).

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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