Working Paper: NBER ID: w0977
Authors: Kim B. Clark; Lawrence H. Summers
Abstract: This paper examines the relative importance of timing and persistence elements in explaining cyclical fluctuations in labor supply. Data from the natural experiment provided by World War I1 and cross-sectional data on American local labor markets, as well as aggregate time-series data are used in the empirical work. We find little evidence that timing effects play an important role in labor market dynamics. The evidence suggests that views emphasizing persistence are more accurate, and that previous employment tends to raise the probability of subsequent employment.
Keywords: Labor Force Participation; Cyclical Fluctuations; Persistence Effects; Timing Effects
JEL Codes: J22; E24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| previous employment (J63) | subsequent employment (J68) |
| longer employment histories (J29) | remain employed (J63) |
| transitory wage changes (J31) | labor supply (J20) |
| timing effects (C41) | labor supply (J20) |
| persistence of employment (J63) | long-term labor supply decisions (J29) |