Working Paper: NBER ID: w1376
Authors: Ben S. Bernanke; James L. Powell
Abstract: This paper studies the cyclical behavior of a number of industrial labor markets of the pre-war (1923-1939) and post-war (1954-1982) eras. In the spirit of Burns and Mitchell we do not test a specific structural model of the labor market but instead concentrate on describing the qualitative features of the (monthly, industry-level) data.The two principal questions we ask are: First, how is labor input (as measured by the number of workers, the hours of work, and the intensity of utilization) varied over the cycle ? Second, what is the cyclical behaviorof labor compensation (as measured by real wages, product wages, and real weekly earnings) ? We study these questions in both the frequency domain and the time domain. Many of our findings simply reinforce, or perhaps refine, existing perceptions of cyclical labor market behavior. However, we do find some interesting differences between the pre-war and the post-war periods in ther elative use of layoffs and short hours in downturns, and in the cyclical behavior of the real wage.
Keywords: Labor Markets; Cyclical Behavior; Real Wages; Industrial Economics
JEL Codes: E32; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor input (J22) | business cycle (E32) |
| layoffs (J63) | labor input (J22) |
| increased importance of unions (J51) | layoffs (J63) |
| unemployment insurance programs (J65) | layoffs (J63) |
| output (C67) | real wages (J31) |
| postwar period (N44) | real wages (J31) |
| severe recessions (F44) | labor productivity (J24) |