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Federal Reserve Bank of Atlanta
FRB Atlanta Working Paper
Some Like It Hot: Assessing Longer-Term Labor Market Benefits from a High-Pressure Economy
Julie L. Hotchkiss
Robert E. Moore
Abstract

This paper explores evidence for positive hysteresis in the labor market. Using data from the National Longitudinal Surveys of Youth, we find that negative labor market outcomes during high unemployment periods are mitigated by exposure to a high-pressure economy during the preceding expansion. Breaking total exposure into intensity and duration suggests that these two dimensions have differing impacts. However, the benefits of exposure are not enough to overcome the greater negative impact of high unemployment periods on labor market outcomes of disadvantaged groups, making extension of high-pressure economic environments efficacious in reducing labor market gaps.


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Julie L. Hotchkiss & Robert E. Moore, Some Like It Hot: Assessing Longer-Term Labor Market Benefits from a High-Pressure Economy, Federal Reserve Bank of Atlanta, FRB Atlanta Working Paper 2018-1, 01 Jun 2018, revised 01 Oct 2018.
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Keywords: hysteresis; unemployment; labor market gaps; labor force participation; wage gaps
DOI: 10.29338/wp2018-1b
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