Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Stock-market-based measures of sectoral shocks and the unemployment rate
Downturns in the construction and finance sectors played a significant role in the recent recession. A stock-market-based measure that captures sectoral shocks shows that these disturbances are important for explaining long-duration unemployment. This is consistent with the intuition that sectoral shocks cause workers to engage in time-consuming moves across industries in their searches for work. It also suggests that it will take a while before the more than 1.8 million unemployed construction workers and close to a half million unemployed finance and insurance workers find jobs.
Cite this item
Puneet Chehal & Prakash Loungani & Bharat Trehan, "Stock-market-based measures of sectoral shocks and the unemployment rate"
, Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 23, 2010.
Keywords: Unemployment ; Employment ; Construction industry ; Financial services industry
This item with handle RePEc:fip:fedfel:y:2010:i:aug2:n:2010-23
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