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The cyclical component of labor market polarization and jobless recoveries in the US

Paul Gaggl () and Sylvia Kaufmann ()

Journal of Monetary Economics, 2020, vol. 116, issue C, 334-347

Abstract: Based on quarterly occupation-level data from the US Current Population Survey for 1976–2013, we exploit common cyclical employment dynamics to identify two clusters of occupations that roughly correspond to the widely discussed notion of “routine” and “non-routine” jobs. After decomposing the cyclical dynamics into a cluster-specific (“structural”) and an occupation-specific (“idiosyncratic”) component, we detect significant structural breaks in the systematic dynamics of both clusters around 1990. We show that, absent these breaks, employment in the three “jobless recoveries” since 1990 would have recovered significantly more strongly than observed in the data, even after controlling for observed idiosyncratic shocks.

Keywords: Employment polarization; Jobless recoveries; Dynamic factor models (search for similar items in EconPapers)
JEL-codes: E24 E32 J21 (search for similar items in EconPapers)
Date: 2020
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Related works:
Working Paper: The Cyclical Component of Labor Market Polarization and Jobless Recoveries in the US (2016) Downloads
Working Paper: The Cyclical Component of Labor Market Polarization and Jobless Recoveries in the US (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:116:y:2020:i:c:p:334-347

DOI: 10.1016/j.jmoneco.2019.11.005

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