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Asymmetric labor force participation decisions over the business cycle: evidence from U.S. microdata

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Author Info
Julie L. Hotchkiss
John C. Robertson

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Abstract

The purpose of this paper is to explore the microfoundations of the observed asymmetric movement in aggregate unemployment rates. Using U.S. data, we find that individual labor force participation responds asymmetrically to changes in local labor market conditions, consistent with the pattern of movements in the aggregate unemployment rate. Differences in the asymmetry and sensitivity of labor force participation decisions are found across gender, age, and education groups, and these differences are used to anticipate changes in the aggregate movements as population characteristics change over time.

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Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2006-08.

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Date of creation: 2006
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Handle: RePEc:fip:fedawp:2006-08

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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.:
  1. Note: For best results & the figures should be printed on a non-Postscript printer. Hoynes & H., . "The Employment, Earnings, and Income of Less-Skilled Workers over the Business Cycle," Institute for Research on Poverty Discussion Papers 1199-99, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
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  2. Gunnar Bårdsen & Stan Hurn & Zoë McHugh, 2002. "A smooth-transition model of the Australian unemployment rate," Working Paper Series 1002, Department of Economics, Norwegian University of Science and Technology, revised 01 Jul 2003. [Downloadable!]
  3. Darby, Julia & Hart, Robert A. & Vecchi, Michela, 2001. "Labour force participation and the business cycle: a comparative analysis of France, Japan, Sweden and the United States," Japan and the World Economy, Elsevier, vol. 13(2), pages 113-133, April. [Downloadable!] (restricted)
  4. Andrés Erosa & Luisa Fuster & Diego Restuccia, 2005. "A Quantitative Theory of the Gender Gap in Wages," Working Papers tecipa-199, University of Toronto, Department of Economics. [Downloadable!]
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  5. Rebecca M. Blank & Heidi Shierholz, 2006. "Exploring Gender Differences in Employment and Wage Trends Among Less-Skilled Workers," NBER Working Papers 12494, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Heather Antecol & Kelly Bedard, 2004. "The Racial Wage Gap: The Importance of Labor Force Attachment Differences across Black, Mexican, and White Men," Journal of Human Resources, University of Wisconsin Press, vol. 39(2). [Downloadable!] (restricted)
  7. Heather Antecol & Kelly Bedard, 2001. "The Racial Wage Gap: The Importance of Labor Force Attachment Differences Across Black, Mexican and White Men," Claremont Colleges Working Papers 2001-35, Claremont Colleges. [Downloadable!]
  8. Simon Burgess & Hélène Turon, 2005. "Unemployment dynamics in Britain," Economic Journal, Royal Economic Society, vol. 115(503), pages 423-448, 04. [Downloadable!] (restricted)
  9. H. Naci Mocan & Turan G. Bali, 2005. "Asymmetric Crime Cycles," NBER Working Papers 11210, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Lisa Barrow, 2004. "Is the official unemployment rate misleading? a look at labor market statistics over the business cycle," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 21-35. [Downloadable!]
  11. Philip Rothman, 1998. "Forecasting Asymmetric Unemployment Rates," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 164-168, February. [Downloadable!] (restricted)
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  12. Robert S. Gay & William L. Wascher, 1989. "Persistence Effects in Labor Force Participation," Eastern Economic Journal, Eastern Economic Association, vol. 15(3), pages 177-187, Jul-Sep. [Downloadable!]
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  13. James D. Hamilton, 2005. "What's real about the business cycle?," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 435-452. [Downloadable!]
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  14. Erica L. Groshen & Simon Potter, 2003. "Has structural change contributed to a jobless recovery?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, issue Aug. [Downloadable!]
  15. Polivka, Anne E, 1996. "Data Watch: The Redesigned Current Population Survey," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 169-80, Summer. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Julie L. Hotchkiss & M. Melinda Pitts, 2007. "Evidence of demand factors in the determination of the labor market intermittency penalty," Working Paper 2007-16, Federal Reserve Bank of Atlanta. [Downloadable!]
  2. Julie L. Hotchkiss & M. Melinda Pitts & Mary Beth Walker, 2008. "Working with children? the probability of mothers exiting the workforce at time of birth," Working Paper 2008-08, Federal Reserve Bank of Atlanta. [Downloadable!]
  3. Catalina Amuedo-Dorantes & Jean Kimmel, 2007. "Moonlighting over the Business Cycle," Working Papers 0028, San Diego State University, Department of Economics. [Downloadable!]
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