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The response of state employment to oil price volatility

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  • Wei Kang
  • David Penn
  • Joachim Zietz

Abstract

Unobserved component models are estimated on monthly data over the period 1983 to 2010 to explain the response of U.S. state employment to oil price volatility. Univariate models are estimated for each state, multivariate models for several groups of states. For most states, oil price volatility has a statistically significant and negative impact on employment after about a quarter of a year. The impact is more pronounced for states with large GDP shares in construction, auto production, retail, and the hospitality industry. States with emphasis on knowledge intensive industries and reliance on nuclear power are much less affected. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Wei Kang & David Penn & Joachim Zietz, 2015. "The response of state employment to oil price volatility," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(3), pages 478-500, July.
    • Handle: RePEc:spr:jecfin:v:39:y:2015:i:3:p:478-500
    DOI: 10.1007/s12197-013-9252-4
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    More about this item

    Keywords

    State employment; Oil price volatility; GARCH; Unobserved component model; JEL Classification; R23; Q43;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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