On the importance of the participation margin for labor market fluctuations

• 成果类型: Article
• 署名作者: Elsby, Michael W. L.; Hobijn, Bart; Sahin, Ayseguel
• 署名单位: University of Edinburgh; Federal Reserve System - USA; Federal Reserve Bank - San Francisco; Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2015.01.004
• 发表日期: 2015
• 页码: 64-82
• 关键词: Worker flows; unemployment; business cycles; labor force participation

摘要

Conventional analyses of labor market fluctuations ascribe a minor role to labor force participation. We show, by contrast, that flows-based analyses imply that the participation margin accounts for around one-third of unemployment fluctuations. A novel stock-flow apparatus establishes these facts, delivering three further contributions. First, the role of the participation margin appears robust to adjustments for spurious transitions induced by reporting error. Second, conventional stocks-based analyses are subject to a stock-flow fallacy, neglecting offsetting forces of worker flows on the participation rate. Third, increases in labor force attachment among the unemployed during recessions are a leading explanation for the role of the participation margin. (C) 2015 Elsevier B.V. All rights reserved.