The Demand for Youth: Implications for the Hours Volatility Puzzle

Nir Jaimovich, Seth Pruitt () and Henry E. Siu

No 14697, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The employment and hours worked of young individuals fluctuate much more over the business cycle than those of prime-aged individuals. Understanding the mechanism underlying this observation is key to explaining the volatility of aggregate hours over the cycle. We argue that the joint behavior of age-specific hours and wages in the U.S. data point to differences in the cyclical characteristics of labor demand. To articulate this view, we consider a production technology displaying capital-experience complementarity. We estimate the key parameters governing the degree of complementarity and show that the model can account for the behavior of age-specific hours and wages while generating a series of aggregate hours that is nearly as volatile as output.

JEL-codes: E0 E32 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-bec, nep-dge, nep-lab and nep-mac
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published as The Demand for Youth: Explaining Age Differences in the Volatility of Hours, American Economic Review, December 2013, vol. 103, issue 7, 3022-3044 (with Henry Siu and Seth Pruitt).

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Working Paper: The demand for youth: implications for the hours volatility puzzle (2009)
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