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Title: Three Essays on Sectoral Change and Unemployment

Citation Type: Dissertation/Thesis

Publication Year: 2018

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Abstract: The first chapter of this dissertation examines the phenomenon of labor reallocation at the level of industry during periods of recession and recovery. Whether permanent shifts of industries’ labor demand curves contribute to cyclical unemployment remains a highly controversial issue. With a focus on the timing of recessions and recoveries, I evaluate the empirical support for two competing explanations of cyclical unemployment: the pure sectoral-shifts hypothesis and the pure aggregate disturbances hypothesis. Although recessions are considered times of low aggregate demand, they also coincide with remarkably large permanent changes to the sectoral distribution of labor demand. Strikingly, I show that, for declining sectors, the majority of jobs destroyed during a recession are lost permanently and do not reemerged during the subsequent economic recovery. This fact contradicts the idea that recessions are solely periods of weak aggregate demand. In addition, the observation that employment gains in expanding sectors tend to concentrate during economic recoveries casts doubt on a pure sectoral-shifts story. The findings suggest that, on their own, these two hypotheses provide incomplete explanations for the relatively high unemployment observed after business cycle downturns. The second chapter builds on the idea of the first by studying the impact of changes in local industry labor demand on unemployment transitions. Most research examining the relationship between local labor market conditions and unemployment summarize these conditions in the form of Bartik's (1991) index. Such studies overlook an important component of local demand conditions, namely, the fortunes in workers' prior industries. If labor is perfectly mobile between sectors, the performance of an unemployed person's prior industry should not . . .

Url: https://tigerprints.clemson.edu/all_dissertations/2108/?utm_source=tigerprints.clemson.edu%2Fall_dissertations%2F2108&utm_medium=PDF&utm_campaign=PDFCoverPages

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Authors: Sessa, Richard

Institution: Clemson University

Department: Economics

Advisor: Curtis Simon

Degree: Ph.D

Publisher Location: Clemson, South Carolina

Pages: 113

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Other, Poverty and Welfare

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