The Demographic Composition of Cyclical Variations in Employment

Keywords

business cycles, demography, economic factors, employment, employment trends, labor force nonparticipants, labor market, models, participant characteristics, unemployment, work experience, youth employment

Abstract

This paper analyzes the demographic patterns of cyclical swings in the labor market by decomposing movement in employment into changes in unemployment and participation. The focus is on the interrelations among participation, employment and unemployment, with particular emphasis on the participation rate as a prime determinant of the labor market experience of various demographic groups. The first section of the paper briefly reviews the evidence indicating the importance of participation fluctuations. An empirical model is described and several variants are discussed. The second section discusses empirical results for various groups. Differences in labor market experience by age, sex, race, and marital states are considered. From the findings, 'the-importance of the participation rate in affecting the cyclical behavior of both employment and unemployment is concluded. Another finding' is that young worker' bear a disproportionate share of cyclical fluctuations. The third section analyzes the impact of aggregate demand policy on high unemployment demographic groups. It is concluded that failure to consider participation led to undue pessimism about the effects of aggregate demand policy on high unemployment groups. The fourth and final sections of the paper summarize the conclusions and discuss some of their implications.

Original Publication Citation

"""The Demographic Composition of Cyclical Employment Variations"" (Winter 1980). Journal of Human Resources. (With L.H. Summers)"

Document Type

Peer-Reviewed Article

Publication Date

1980

Publisher

Journal of Human Resources

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Full Professor

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