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Some Like It Hot: Assessing Longer-Term Labor Market Benefits from a High-Pressure Economy

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  • Julie L. Hotchkiss
  • Robert E. Moore

Abstract

This paper explores evidence for positive hysteresis in the labor market. Using data from the National Longitudinal Surveys of Youth, we find that negative labor market outcomes during high unemployment periods are mitigated by exposure to a high-pressure economy during the preceding expansion. Breaking total exposure into intensity and duration suggests that these two dimensions have differing impacts. However, the benefits of exposure are not enough to overcome the greater negative impact of high unemployment periods on labor market outcomes of disadvantaged groups, making extension of high-pressure economic environments efficacious in reducing labor market gaps.

Suggested Citation

  • Julie L. Hotchkiss & Robert E. Moore, 2018. "Some Like It Hot: Assessing Longer-Term Labor Market Benefits from a High-Pressure Economy," FRB Atlanta Working Paper 2018-1, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:2018-01
    DOI: 10.29338/wp2018-1b
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    References listed on IDEAS

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    Cited by:

    1. Kalee Burns & Julie L. Hotchkiss, 2019. "Migration Constraints and Disparate Responses to Changing Job Opportunities," FRB Atlanta Working Paper 2019-1, Federal Reserve Bank of Atlanta.
    2. Stephanie Aaronson & Mary C. Daly & William L. Wascher & David W. Wilcox, 2019. "Okun Revisited: Who Benefits Most from a Strong Economy," Finance and Economics Discussion Series 2019-072, Board of Governors of the Federal Reserve System (U.S.).
    3. Bruce Fallick & Pawel Krolikowski, 2019. "Excess Persistence in Employment of Disadvantaged Workers," Working Papers 201801R, Federal Reserve Bank of Cleveland.
    4. John C Bluedorn & Daniel Leigh, 2019. "Hysteresis in Labor Markets? Evidence from Professional Long-Term Forecasts," IMF Working Papers 19/114, International Monetary Fund.
    5. Laura Feiveson & Nils Gornemann & Julie L. Hotchkiss & Karel Mertens & Jae W. Sim, 2020. "Distributional Considerations for Monetary Policy Strategy," Finance and Economics Discussion Series 2020-073, Board of Governors of the Federal Reserve System (U.S.).
    6. Kalee Burns & Julie L. Hotchkiss, 2020. "Mismatch of Jobs and People: Do Migration Constraints Put Racial Minorities at a Disadvantage?," Policy Hub 2020-6, Federal Reserve Bank of Atlanta.

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    More about this item

    Keywords

    hysteresis; unemployment; labor market gaps; labor force participation; wage gaps;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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