Research Interests
Primary: Macroeconomics, labor markets
Secondary: Applied econometrics, time series
Working Papers
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Understanding Unemployment Dynamics: The Role of Time Aggregation (job market paper)
November 2008
This paper uses weekly data from the Survey of Income and Program Participation (SIPP) to estimate the role of time aggregation in measuring gross labor force flows and unemployment dynamics. Time aggregation is substantial: gross flows estimated from monthly data understate the true number of transitions by 15–24 percent. Time aggregation in both separations to unemployment and accessions from unemployment comoves positively with the business cycle. The effect from time aggregation on separations is roughly offset by its effect on accessions, however, creating no meaningful cyclical bias in measured gross flows or hazard rates. Contrary to claims by Hall (2006) and Shimer (2007), separation hazard rates calculated from the SIPP and the Current Population Survey are strongly countercyclical and remain so after adjusting for time aggregation. In addition, the separation hazard rate contributes fully one-half of the cyclical variance of the steady-state unemployment rate after adjusting for time aggregation.
The Cyclicality of Worker Flows: New Evidence from the SIPP
with Shigeru Fujita and Garey Ramey
January 2007
Drawing on CPS data, Fujita and Ramey (2006) show that total monthly job loss and hiring among U.S. workers, as well as job loss hazard rates, are strongly countercyclical, while job finding hazard rates are strongly procyclical. They also find that total job loss and job loss hazard rates lead the business cycle, while total hiring and job finding rates trail the cycle. In the current paper we use information from the Survey on Income and Program Participation (SIPP) to reevaluate these findings. SIPP data are used to construct new longitudinally-consistent gross flow series for U.S. workers, covering 1983-2003. The results strongly validate the Fujita-Ramey findings, with two important exceptions: (1) total hiring leads the cycle in the SIPP data, and (2) the job loss rate is substantially more volatile than the job finding rate at business cycle frequencies.
A Longitudinal Analysis of the Current Population Survey
September 2006 (revised version forthcoming)
This paper creates a new database, the Longitudinal Population Database (LPD), that utilizes all longitudinal information in the Current Population Survey (CPS) over 1976–2007 to construct the complete interview history of every person surveyed. I then use the LPD to assess whether geographic mobility biases gross flows estimated from the CPS. Because the CPS does not follow households that move to a new address, a bias can result if the labor market behavior of movers, which cannot be observed, differs systematically from that of nonmovers. Using the LPD, I can identify households that move and therewith estimate a bound on the bias to gross flows due to mobility. The difference in magnitude between cyclical components of gross flows estimated from the population of nonmovers and those estimated from the entire population is less than 3 percent. Thus, geographic mobility does not significantly affect the cyclicality of measured gross flows.