Age and gender differentials in unemployment and hysteresis

Amy Guisinger, Jackson Laura E. () and Michael Owyang
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Jackson Laura E.: Bentley University, Waltham, USA
Authors registered in the RePEc Author Service: Laura Jackson Young

Studies in Nonlinear Dynamics & Econometrics, 2024, vol. 28, issue 4, 567-581

Abstract: We use a time-varying panel unobserved components model to estimate unemployment gaps disaggregated by age and gender. Recessions before COVID affected men’s labor market outcomes more than women’s; however, the reverse was true for the COVID recession, with effects amplified for younger workers. We introduce time-variation in both the hysteresis dynamics and the Phillips-curve coefficients on labor market slack. The aggregate Phillips curve flattens over time and hysteresis is countercyclical for all groups. We find heterogeneity in both the Phillips curve and hysteresis coefficients, with wages responding more to workers with an outside option (high school- and retirement-age) and larger effects of hysteresis for younger workers.

Keywords: hysteresis; natural rate of unemployment; time varying parameters (search for similar items in EconPapers)
JEL-codes: C32 E24 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Age and Gender Differentials in Unemployment and Hysteresis (2022)
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DOI: 10.1515/snde-2022-0068

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