 How Important is the Intermediate Input Channel in Explaining Sectoral Employment Comovement over the Business Cycle?K. Kim and Y.S. Kim No 331111, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Abstract: This paper studies a multisector dynamic stochastic general equilibrium model calibrated to the 2-digit SIC level intermediate input-use and capital-use tables to investigate the importance of the intermediate input channel in explaining the sectoral employment comovement over the business cycle. In general, the business cycle comovement in employment depends on preferences as well as technology with intersectoral linkages. With indivisible labor implying that consumers do not care about the variability of leisure, the intersectoral linkages at a disaggregated level are sufficient to generate the strong business cycle comovement across sectors. With divisible labor, however, leisure-smoothing effect can dominate a sector's intersectoral linkages, implying a negative comovement. It further requires some form of worker's reluctance to substitute labor hours across sectors. Referring to some micro-level studies on the low wage elasticity of labor supply, a low substitution of labor hours is shown to generate the strong business cycle comovement in sectoral hours worked. Keywords: Labor and Human Capital; Research Methods/Statistical Methods (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331111 Access Statistics for this paper More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC. |
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