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Discussion Paper
Updating the Labor Market Conditions Index
Starting Monday, October 6th, we will provide updated estimates of the labor market conditions index (LMCI) every month.
Working Paper
Racial Gaps in Labor Market Outcomes in the Last Four Decades and over the Business Cycle
We examine racial disparities in key labor market outcomes for men and women over the past four decades, with a special emphasis on their evolution over the business cycle. Blacks have substantially higher and more cyclical unemployment rates than whites, and observable characteristics can explain very little of this differential, which is importantly driven by a comparatively higher risk of job loss. In contrast, the Hispanic-white unemployment rate gap is comparatively small and is largely explained by lower educational attainment of (mostly foreign-born) Hispanics. Regarding labor force ...
Discussion Paper
Why is Involuntary Part-Time Work Elevated?
Despite substantial improvement in the unemployment rate and several other labor market indicators, the number of Americans involuntarily working part time (also called "part-time for economic reasons") remains unusually high nearly five years into the recovery. In this note, we focus on two questions: 1. What can Current Population Survey (CPS) data on the stocks and flows of involuntary part-time employment say about the underlying reasons for its persistently high rate? And 2. Based on this analysis, what can we expect for the evolution of involuntary part-time work going forward?
Working Paper
Who Killed the Phillips Curve? A Murder Mystery
Is the Phillips curve dead? If so, who killed it? Conventional wisdom has it that the sound monetary policy since the 1980s not only conquered the Great Inflation, but also buried the Phillips curve itself. This paper provides an alternative explanation: labor market policies that have eroded worker bargaining power might have been the source of the demise of the Phillips curve. We develop what we call the "Kaleckian Phillips curve", the slope of which is determined by the bargaining power of trade unions. We show that a nearly 90 percent reduction in inflation volatility is possible even ...
Discussion Paper
Updating the Labor Market Conditions Index
Starting Monday, October 6th, we will provide updated estimates of the labor market conditions index (LMCI) every month.
Discussion Paper
A Cautionary Note on the Help Wanted Online Data
Measuring labor demand is one of the crucial tasks in analyzing the labor market. In the case of the United States, two main data sources geared towards this objective are the Job Openings and Labor Turnover Survey (JOLTS), administered by the Bureau of Labor Statistics, and the Conference Board Help Wanted Online series (HWOL). In this note we exploit the timing of Craigslist price increases by metropolitan area (MSA) to find their effect on online vacancy posting.
Working Paper
The Aggregate Effects of Labor Market Frictions
Labor market frictions are able to induce sluggish aggregate employment dynamics. However, these frictions have strong implications for the source of this propagation: They distort the path of aggregate employment by impeding the flow of labor across firms. For a canonical class of frictions, we show how observable measures of such flows can be used to assess the effect of frictions on aggregate employment dynamics. Application of this approach to establishment microdata for the United States reveals that the empirical flow of labor across firms deviates markedly from the predictions of ...
Working Paper
VACANCY CHAINS
Replacement hiring—recruitment that seeks to replace positions vacated by workers who quit—plays a central role in establishment dynamics. We document this phenomenon using rich microdata on U.S. establishments, which frequently report no net change in their employment, often for years at a time, despite facing substantial gross turnover in the form of quits. We propose a model in which replacement hiring is driven by the presence of a putty-clay friction in the production structure of establishments. Replacement hiring induces a novel positive feedback channel through which an initial ...
Working Paper
Unemployment Insurance Experience Rating and Labor Market Dynamics
Unemployment insurance experience rating imposes higher payroll tax rates on firms that have laid off more workers in the past. To analyze the effects of UI tax policy on labor market dynamics, this paper develops a search model of unemployment with heterogeneous firms and realistic UI financing. The model predicts that higher experience rating reduces both job creation and job destruction. Using firm-level data from the Quarterly Census of Employment and Wages, the model is tested by comparing job creation and job destruction across states and industries with different UI tax schedules. The ...
Working Paper
Reconciling Unemployment Claims with Job Losses in the First Months of the COVID-19 Crisis
In the spring of 2020, many observers relied heavily on weekly initial claims for unemployment insurance benefits (UI) to estimate contemporaneous reductions in US employment induced by the COVID-19 pandemic. Though UI claims provided a timely, high-frequency window into mounting layoffs, the cumulative volume of initial claims filed through the May reference week substantially exceeded realized reductions in payroll employment and likely contributed to the historically large discrepancy between consensus expectations of further April-to-May job losses and the strong job gains reflected in ...