Some Like it Hot: Assessing Longer-Term Labor Market Benefits from a High-Pressure Economy

Julie Hotchkiss and Robert Moore

International Journal of Central Banking, 2022, vol. 18, issue 2, 193-243

Abstract: This paper finds that both "hot" and "cold" economic environments affect current and future labor market outcomes (i.e., time spent unemployed and out of the labor force and hourly pay) differentially between advantaged and disadvantaged groups. Using longitudinal data, we find that while disadvantaged workers reap greater benefits from exposure to hot economies, that benefit alone is not enough to offset the greater cost of exposure to cold economic environments. This suggests that an over-expansive policy is limited in its ability to achieve lasting reductions in labor market gaps, which would likely be better served by a policy prioritizing reduced economic volatility.

JEL-codes: E24 E60 J31 J64 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Working Paper: Some Like It Hot: Assessing Longer-Term Labor Market Benefits from a High-Pressure Economy (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2022:q:2:a:5

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