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Cyclical implications of the declining manufacturing employment share

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  • Andrew J. Filardo

Abstract

Over the last 35 years, the U.S. economy has created service sector jobs at a faster pace than manufacturing sector jobs. Not only has this trend led to a significant shift in the composition of the labor force from manufacturing to services, but it has also fundamentally changed the characteristics of the average workplace. ; Some economists have argued that the ongoing structural shifts from manufacturing employment to services employment may have had the additional consequence of smoothing the business cycle. A smoother cycle would be welcomed and would yield several benefits. The economy would grow more stably and would provide a more predictable backdrop for working, saving, and investing. ; Filardo investigates whether the shift from manufacturing to services employment has muted the business cycle. He concludes that the declining manufacturing employment share may have substantially changed the workplace but has had little impact on the smoothness of the business cycle.

Suggested Citation

  • Andrew J. Filardo, 1997. "Cyclical implications of the declining manufacturing employment share," Economic Review, Federal Reserve Bank of Kansas City, vol. 82(Q II), pages 63-87.
    • Handle: RePEc:fip:fedker:y:1997:i:qii:p:63-87:n:v.82no.2
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    References listed on IDEAS

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    2. Daiji Kawaguchi & Tetsushi Murao, 2012. "Who bears the cost of the business cycle? Labor-market institutions and volatility of the youth unemployment rate," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-22, December.
    3. Gern, Klaus-Jürgen & Gottschalk, Jan & Kamps, Christophe & Sander, Birgit & Scheide, Joachim & Strauß, Hubert, 2001. "Deutliche Abkühlung der Weltkonjunktur," Open Access Publications from Kiel Institute for the World Economy 2572, Kiel Institute for the World Economy (IfW Kiel).
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    5. Camacho, Maximo & Leiva-Leon, Danilo, 2019. "The Propagation Of Industrial Business Cycles," Macroeconomic Dynamics, Cambridge University Press, vol. 23(1), pages 144-177, January.
    6. Margaret M. McConnell & Gabriel Perez-Quiros, 2000. "Output fluctuations in the United States: what has changed since the early 1980s?," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
    7. Eggers, Andrew & Ioannides, Yannis M., 2006. "The role of output composition in the stabilization of US output growth," Journal of Macroeconomics, Elsevier, vol. 28(3), pages 585-595, September.
    8. Barnichon, Regis, 2010. "Productivity and unemployment over the business cycle," Journal of Monetary Economics, Elsevier, vol. 57(8), pages 1013-1025, November.
    9. Gern, Klaus-Jürgen & Scheide, Joachim & Schlie, Markus & Strauß, Hubert, 1998. "Verhaltener Produktionsanstieg in den Industrieländern," Open Access Publications from Kiel Institute for the World Economy 1788, Kiel Institute for the World Economy (IfW Kiel).
    10. Aleksandra Gaweł, 2004. "The Business Cycle Dependent Fluctuation of Employment in Sectors in Polish Economy," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 12.
    11. Düllmann, Klaus & Trapp, Monika, 2004. "Systematic Risk in Recovery Rates: An Empirical Analysis of US Corporate Credit Exposures," Discussion Paper Series 2: Banking and Financial Studies 2004,02, Deutsche Bundesbank.

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