Sectoral shifts and aggregate unemployment
Some recent research has taken the view that sectoral or industry-specific shocks significantly affect aggregate unemployment by increasing the amount of inter-industry labor reallocation required. The empirical evidence for this view rests on the finding that during the 1950s - and again during the 1970s - there was a positive correlation between aggregate unemployment and the dispersion of employment growth rates. This thesis demonstrates that this correlation arises largely because oil price shocks affect both unemployment and the dispersion of employment growth. Once the dispersion due to oil shocks is accounted for, the residual dispersion in employment has very low explanatory power for unemployment. Since the dispersion index does not measure pure sectoral shifts, an alternate measure of dispersion is developed that serves as a better proxy for the amount of inter-industry labor reallocation required each period. Estimates using this measure suggest that, during the 1950s, temporary increases in the relative price of oil were responsible for generating the observed correlation. On the other hand, sectoral shifts were important during the 1970s; in particular, the 1973 oil price increase has had significant reallocative effects on the economy. This contention is subjected to further tests by looking at the time-series behavior of employment in durable-goods industries and also by following the inter-industry movements of workers over time through the use of panel data.
- Research Organization:
- Rochester Univ., NY (USA)
- OSTI ID:
- 5764304
- Resource Relation:
- Other Information: Thesis (Ph.D)
- Country of Publication:
- United States
- Language:
- English
Similar Records
Macroeconomic policy, investment, and urban unemployment in less-developed countries
Energy conservation and the demand for labor: evidence from aggregate data. Final report Oct 80-May 81
Related Subjects
POLICY AND ECONOMY
02 PETROLEUM
EMPLOYMENT
SECTORAL ANALYSIS
ENERGY EXPENSES
ECONOMIC IMPACT
PETROLEUM
PRICES
INDUSTRY
LABOR
ENERGY SOURCES
FOSSIL FUELS
FUELS
290200* - Energy Planning & Policy- Economics & Sociology
020700 - Petroleum- Economics
Industrial
& Business Aspects