Unemployment, Participation and Worker Flows Over the Life-Cycle

Abstract

Artículo de publicación ISIWe estimate life-cycle transition probabilities among employment, unemployment and inactivity for US workers. We assess the importance of each worker flow to account for participation and unemployment rates over the life cycle. We find that inactivity exit and entry matter but the empirically relevant margins defy conventional wisdom: high youth unemployment is due to high employment exit probabilities, while low labour force entry probabilities substantially account for low participation and unemployment among older workers. Our results remain intact under several forms of heterogeneity, time-aggregation bias and misclassification errors.Spanish Ministry of Economy and Competitiveness ECO2012-32392 Severo Ochoa Programme for Centres of Excellence in RD SEV-2011-0075 Fondecyt 1120593 1111045

Labor-market frictions, incomplete insurance and severance payments

“…The figure also shows that the separation rate increases sharply at the end of the working life. While this feature is absent from the empirical behavior of the employment-to-unemployment probability, it is strongly consistent with the behavior of the employment-to-nonparticipation probability; see, for instance, the numerous charts reported in Choi et al [2015].…”

Unemployment fluctuations over the life cycle

“…The unemployment steady state is consistent with the BLS unemployment rate across age groups: 11.07% for 20-24, 5.17% for 25-54, 4.12% for 55+, and 6.46% for 16+. Source: BLS monthly SA data, 1976 Jan-2013 March, Men 9 The estimated means are consistent with the decreasing transitions with age found in the male population inChoi et al (2015),Menzio et al (2016), andGervais et al (2012). The transition rates in our data show higher levels than in their calculations because we discard labor market transitions considered in these studies (namely inactivity forChoi et al (2015) and job-to-job transitions forMenzio et al (2016)).…”

“…Source: BLS monthly SA data, 1976 Jan-2013 March, Men 9 The estimated means are consistent with the decreasing transitions with age found in the male population inChoi et al (2015),Menzio et al (2016), andGervais et al (2012). The transition rates in our data show higher levels than in their calculations because we discard labor market transitions considered in these studies (namely inactivity forChoi et al (2015) and job-to-job transitions forMenzio et al (2016)). Our results are not comparable toMenzio et al (2016) because they restrict their sample to individuals with a high school degree.…”

“…Average labor market flows differ by age, with a decreasing pattern in job separation and job finding rates (Menzio et al (2016), Choi et al (2015), Elsby et al (2011), Gervais et al (2012), Elsby et al (2010)). However, little is known about the cyclical behavior of these transition rates across age groups.…”

Youthful hours: Shifting poll-opening times manipulates voter demographics

“…This is measured with population density, with a logarithmic transformation to reduce variable skew. Unemployment and local incomes also correlate with both age and electoral participation rates (Burden and Wichowsky, 2014;Choi et al, 2015); income is measured here using Census estimates of median household income deflated to 2010 dollars. Table 2 brings these variables together in ordinary leastsquares models with panel-corrected standard errors and, as with Table 1, congressional district-year fixed effects.…”