Unemployment Fluctuations in the United States: Further Tests of the Sectoral-Shifts Hypothesis

Mills, Terence C.; Pelloni, Gianluigi; Zervoyianni, Athina

doi:10.2307/2109866

Cited by 29 publications

(23 citation statements)

References 20 publications

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“…These results support the view of Mills, Pelloni, and Zervoyianni (1995) and extend their time series evidence to the recent period . The time series approach for the aggregate specification (Table 9) reflects Lilien's initial specification that cannot discriminate between aggregate and sectoral shocks.…”

Section: Resultssupporting

confidence: 89%

Regional and Sectoral Evidence of the Macroeconomic Effects of Labor Reallocation: A Panel Data Analysis

2016

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This article revisits the sectoral shifts hypothesis by examining unemployment fluctuations for 48 U.S. states over the period 1990:M01-2011:M12. We develop a panel approach that incorporates dynamics, parameter heterogeneity, aggregate factors, and cross-sectional dependence (CSD). Our findings provide support for a positive and significant effect of the employment dispersion index on unemployment. This outcome is robust under alternative specifications and measures of employment dispersion. The empirical evidence corroborates the presence and relevance of CSD and heterogeneity among states. The results show that, once unobserved common factors and cross-state heterogeneity are taken into account, labor reallocation has a significant effect on unemployment that is half the size of the estimate when cross-sectional dependence is not taken into account. (JEL E24, E32, J21, R23, C23)

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Section: Resultssupporting

confidence: 89%

Regional and Sectoral Evidence of the Macroeconomic Effects of Labor Reallocation: A Panel Data Analysis

2016

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“…We estimate an unemployment reduced form equation of the form used by Mills et al (1995). Lilien's (1982) original approach focused only on monetary shocks vis-à-vis reallocation shocks, while Mills et al (1995) allow for a larger set of aggregate covariates thus allowing for a more thorough testing of the sectoral shifts hypothesis.…”

Section: Model and Methodologymentioning

confidence: 99%

“…Lilien's (1982) original approach focused only on monetary shocks vis-à-vis reallocation shocks, while Mills et al (1995) allow for a larger set of aggregate covariates thus allowing for a more thorough testing of the sectoral shifts hypothesis. Using pooled time-series-cross-section data for the period 1995Q1-2015Q1 and for 15 European countries (N=15 and T=81, results to a total of 1165 observations due to data restrictions and adjustments), we employ a dynamic heterogeneous panel analysis for the equation:…”

Section: Model and Methodologymentioning

confidence: 99%

On the significance of labour reallocation for European unemployment: Evidence from a panel of 15 countries

Bakas

Panagiotidis

Pelloni

2016

Journal of Empirical Finance

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We explore the macroeconomic effects of sectoral shifts for 15 European countries. An extensive panel is constructed that allows us the assessment of the impact of labor reallocation on unemployment in the European context. Indexes of labor market turbulence based on alternative sectoral disaggregation are constructed. The effect of labor reallocation on unemployment is found to be positive and significant in all different specifications. This remains robust when we take into account volatility measures in the model. JEL classification: E24, E32, J21, R23, C23Keywords: labor reallocation, sectoral shifts hypothesis, unemployment, EU * Acknowledgements: We would like to thank Richard Bailey and two anonymous referees for their constructive comments and helpful suggestions. We would also like to thank Karim Abadir and Paolo Giordani for their useful comments and suggestions on earlier versions of this work. All remaining errors are our own.Bakas:

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“…Following this idea, many researchers have tried to take account of the differential responses of sectoral employment to aggregate shocks. Samson (1990) and Mills et al (1995), among others, use expected and unexpected money growth to purge the sectoral reallocation measure from aggregate influences. Mills et al (1996) extend the approach and purge relative sectoral employment by regressing it on a variety of explanatory factors, and Abraham and Katz (1986) use step-wise purging methods -which are criticized for over-purging, however.…”

Section: Measuring Sectoral Reallocationmentioning

confidence: 99%

“…Following Mills et al (1995), we implement a parsimonious yet practical specification and purge the original Lilien measure by regressing sectoral relative employment growth on GDP (y) growth and money (M ) growth to capture aggregate demand influences. We subjectively chose a lag length of 2 since additional lags do not change the results.…”

Section: Measuring Sectoral Reallocationmentioning

confidence: 99%

Unemployment and Labor Reallocation in Europe

Hogrefe

Sachs

2014

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Unemployment and labor reallocation in Europe * Jan Hogrefe * * ZEW MannheimAndreas Sachs * * * ZEW MannheimOctober 20, 2014 AbstractWe ask whether sectoral shocks and the subsequent labor reallocation are responsible for unemployment within selected European economies. Our measure of sectoral labor reallocation is adjusted for aggregate influences and the remaining variation is linked to unemployment in country specific dynamic models. For Spain, the ADL-model estimation reveals a significant impact of sectoral reallocation on unemployment that goes beyond usual business cycle patterns. In Italy, there is weaker yet detectable evidence for this mechanism. In Ireland, Portugal and France, no significant influence of sector level shocks on unemployment is found. The results emphasize the potential structural supply side policies have for reducing unemployment in Spain.JEL-Classification: E24, J62, J64

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Unemployment Fluctuations in the United States: Further Tests of the Sectoral-Shifts Hypothesis

Cited by 29 publications

References 20 publications

Regional and Sectoral Evidence of the Macroeconomic Effects of Labor Reallocation: A Panel Data Analysis

Regional and Sectoral Evidence of the Macroeconomic Effects of Labor Reallocation: A Panel Data Analysis

On the significance of labour reallocation for European unemployment: Evidence from a panel of 15 countries

Unemployment and Labor Reallocation in Europe

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