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.
A Longitudinal Analysis of the Current Population Survey: Assessing the Cyclical Bias of Geographic Mobility
November 2008
This paper assesses the implications of geographic mobility for the measurement of U.S. labor market dynamics using the Current Population Survey (CPS). Because the CPS does not follow individuals that move, estimates may be biased if the labor market behavior of movers differs systematically from that of nonmovers. I create a new database, the Longitudinal Population Database (LPD), that utilizes all longitudinal information in the CPS to form a panel data set. I use the LPD to identify persons who move and therewith estimate a bound on the bias from geographic mobility. I find that the cyclical bias arising from geographic mobility is small. At business cycle frequencies, the difference between the separation hazard rate calculated from the entire CPS sample and from a subset that are known not to have moved never exceeds 4 percent. There is little effect of mobility on the job finding hazard rate. I conclude that geographic mobility does not significantly affect CPS labor market dynamics.
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.