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Earnings and Employment Dynamics: Capturing Cyclicality using Mixed Frequency Data

Johan Holmberg ()
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Johan Holmberg: Department of Economics, Umeå University, Postal: Department of Economics, Umeå University, S 901 87 Umeå, Sweden, https://www.umu.se/handelshogskolan

No 991, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: In this paper, we present a model of earnings dynamics that includes transitions in and out of employment as well as business cycle fluctuations. The model is estimated using the method of indirect inference and a mix of Swedish register, survey, and macro data. We find that the business cycle has a larger effect on transitions from unemployment to employment than on the risk of becoming unemployed. By simulating data from the model, we find that the business cycle has a relatively small impact on earnings inequality in Sweden and that women’s labor market outcomes are less sensitive to business cycle fluctuations compared to men’s. Finally, we find that economic crises have a more severe impact on young workers.

Keywords: Earning dynamics; Unemployment; Business cycles; Inequality (search for similar items in EconPapers)
JEL-codes: D31 E32 J24 J64 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2021-06-24
New Economics Papers: this item is included in nep-eur, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:0991

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