Are More Severe Recessions Followed by Stronger Early Expansions of Employment in the Mexican States?

Pablo Mejía-Reyes and Reyna Vergara-González
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Pablo Mejía-Reyes: Universidad Autónoma del Estado de México
Reyna Vergara-González: Universidad Autónoma del Estado de México

The Review of Regional Studies, 2017, vol. 47, issue 3, 243-269

Abstract: This paper estimates conventional linear models to evaluate whether the average growth rate of employment (permanent, temporary, and total) over early expansions depends on the characteristics of prior recessions for the Mexican states during the 2001 and 2008 recessions. After controlling for the initial impulse of external and fiscal shocks as well as for the effects of structural factors, our results suggest that the depth and steepness of prior recessions (measured as the percentage accumulated drop and monthly average growth rate) have negative effects on employment growth over the first 9 and 12 months following the 2001 recession. In contrast, employment growth in the aftermath of the 2008 recession can be explained primarily by external and fiscal shocks. In general, the duration of recessions has no effect on employment growth after recessions.

Keywords: employment; regional business cycles; recessions; expansions (search for similar items in EconPapers)
JEL-codes: E24 E32 R11 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:rre:publsh:v47:y:2017:i:3:p:243-269

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