BESS at MNB May 12, 2010: Regis Barnichon „What drives movements in the unemployment rate?” (joint with Andrew Figura)

Speaker:Regis Barnichon (Federal Reserve Board)

Venue: MNB-Szechenyi Room (Pls bring your ID card with you!)

Time: 15:15 pm, Wednesday, May 12, 2010

Abstract:

We use a Beveridge curve framework and US micro data to decompose unemployment rate movements into: (1) a component driven by changes in labor demand (2) a component driven by changes in labor supply and (3) a component driven by changes in the efficiency of matching unemployed workers to jobs. We find that, historically, cyclical movements in unemployment are dominated by changes in labor demand, although changes in the efficiency of matching can also plays a role. Secular changes in unemployment are dominated by changes in labor supply. The most recent labor market downturn appears to be adhering to the historical pattern: Changes in labor demand appear to explain the large majority of the increase in unemployment since 2007, though decreases in matching efficiency have also been important.

You can download paper here

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