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Title: Sectoral Employment and Aggregate Labor Market Business Cycle Facts

Citation Type: Miscellaneous

Publication Year: 2013

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Abstract: This paper studies the slow job market recovery in the U.S. after each post-1990 recession from a sectoral perspective. I establish the following six stylized facts using BLS establishment survey and IPUMS-CPS March data. (1) The U.S. job market has taken significantly longer to recover after each recession since 1990. (2) Goods sector employment has been shrinking while service sector employment has been expanding. (3) The relative employment growth in the service sector changed from countercyclical to acyclical after 1990, but it remained procyclical in the goods sector. (4) The recovery of goods sector employment was slow after each post-1990 recession. (5) The educational attainment of service sector workers has surpassed that of goods sector workers since 1990. (6) The skill premium of workers with college-plus education has increased faster in the service sector when compared to the goods sector. To the best of my knowledge, this paper is the first to document facts (3)-(6). These six facts suggest that the skill-biased technical change in the service sector has prevented the unskilled workers who are laid off in the goods sector from relocating to the service sector. Thus, it takes longer for an unemployed worker in the goods sector to find a new job, resulting in a sluggish job market recovery at the aggregate level.

Url: https://economics.osu.edu/sites/economics.osu.edu/files/Paper 2 Cui Carol.pdf

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Authors: Cui, Carol

Publisher: The Ohio State Univerity

Data Collections: IPUMS CPS

Topics: Education, Labor Force and Occupational Structure

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