Working Paper: NBER ID: w0514
Authors: Kim B. Clark; Lawrence H. Summers
Abstract: Demographic differences in patterns of employment variation over the business cycle are examined in this paper. Three primary conclusions emerge. First, both participation and unemployment must be considered in any analysis of cyclical changes in the labor market. Second, young people bear a disproportionate share of cyclical employment variation. Third, failure to consider participation has led to undue pessimism about the effect of aggregate demand policy on high unemployment groups. If participation did not surge, reduction in overall unemployment to its 1969 level would reduce the unemployment of almost all demographic groups to very low levels.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| aggregate demand (E00) | participation rates (J22) |
| participation rates (J22) | employment opportunities for young workers (J68) |
| aggregate demand (E00) | unemployment rates of demographic groups (J79) |
| participation rates (J22) | unemployment rates (J64) |
| aggregate demand (E00) | employment experience of high unemployment demographic groups (J68) |
| employment experience of high unemployment demographic groups (J68) | sensitivity to aggregate demand conditions (E00) |
| cyclical behavior of unemployment (J64) | job availability (J68) |
| cyclical behavior of unemployment (J64) | willingness of workers to seek jobs (J68) |
| aggregate demand policies (E00) | unemployment rates of disadvantaged demographic groups (J79) |