Macroeconomic Regimes, Technological Shocks and Employment Dynamics

Abstract

In this work we investigate the interrelations among technology, output and employment in the different states of the U.S. economy (recessions vs. expansions). More precisely, we estimate different threshold vector autoregression (TVAR) models with TFP, hours, and GDP, employing the latter as threshold variable, and we assess the ensuing generalized impulse responses of GDP and hours as to TFP shocks. We find that positive productivity shocks, while spurring GDP growth, display a negative effect on hours worked at least on impact, independently of the state of the economy. In the 1957-2011 period, the effects of productivity shocks on employment are abundantly negative in downturns, but they are not significantly different from zero in good times. However, the impact of TFP shocks in different business cycle regimes depends on the chosen sample: after the mid eighties , productivity shocks increase hours during recessions. Finally, we express and test some conjectures that might have caused the changes in the responses in different time periods.JEL Codes: E32, O33, C32, E63, E20

Macroeconomic Shocks and Employment in sub-Sharan Africa: Do Labour Market Institutions Matter?

“…The negative impact indicates that a negative productivity shock leads to an increase in total employment for the countries. This result confirms previous estimates for developing countries where it is demonstrated that in an attempt to smooth consumption during a negative macroeconomic, households tend increase their labour market participation (Fallon & Lucas, 2002;Ferraresi et al, 2019). Another implication of this outcome is that external shocks that do not translate into productivity shocks do not exert significant effects on employment rate in the sampled SSA countries.…”

“…Moreover, the study also found wide variations in the impact of shocks on employment across sectors, employment status, and location and that exchange rate shocks provided the greatest employment effects among the economies. Ferraresi et al (2019) found that though positive productivity shocks in the U.S. economy stimulate output growth, the effect on employment is negative and debilitating. Similarly, Helm (2020) explored how inter-industry trade shocks affected in-country labour markets arising from within industry demand changes.…”

“…The responses of domestic fundamentals to uncertainties created by exogenous changes in elements of the economic environment is critical for maintaining long run economic balance and sustainability (Blanchard and Wolfers, 2000;Fallon & Lucas, 2002;Ferraresi et al, 2019;Morsy et al, 2021). The drive to ensure minimum impacts of such external influences has necessitated the establishment of domestic institutional frameworks and regulations that are intended to provide important buffers for the economy.…”

“…The foundations for considering different shock patterns and their interactions with institutions can be found in the study by Blachard and Wolfers (2000) which showed that interaction between macroeconomic shocks and institutions effectively explained the divergent impacts of shocks in European countries for over 3 decades. Moreover, there are literature that find the state of economic actors or institutions can lead to differing impacts of shocks on macroeconomic aggregates (Nucci & Riggi, 2011;Auerbach & Gorodnichenko, 2012;Ferraresi, Roventini & Semmler 2019).…”

Utility of science, technology and innovation governance for occupational discourses from the perspective of occupational therapy students

“…STI impact occupation of paid work, such as wage structure (60), wage distribution (61,62), wage premiums (63), and wage level (64). Moreover, STI impact employment structure (65), employment dynamics (66)(67)(68) and unemployment in developing countries (69). STI also affect being occupied with housework (70) and the societal perception of housework as a valued occupation (71)(72)(73)(74), with leisure (75) including high performance sport (76) and volunteering (77,78) to just name a few areas.…”