Uncertainty and the Geography of the Great Recession

Daniel Shoag and Stan Veuger
Additional contact information
Daniel Shoag: Harvard University

Working Paper Series from Harvard University, John F. Kennedy School of Government

Abstract: We document the link between increased levels of economic and policy uncertainty and unemployment at the state-level during the 2007-2009 recession. The cross sectional variation in uncertainty robustly matches the distribution of employment outcomes during this period. When we instrument for this cross sectional variation using preexisting institutions, we find evidence for a causal role for uncertainty in increasing unemployment. A simple model of hiring and firing under uncertainty rationalizes these results, and the within-state distribution of effects across industries, occupations, and individuals is consistent with this model's predictions. Together, these results suggest that increased uncertainty contributed to the severity of the Great Recession.

Date: 2015-03
New Economics Papers: this item is included in nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://research.hks.harvard.edu/publications/getFile.aspx?Id=1173

Related works:
Journal Article: Uncertainty and the geography of the great recession (2016)
Working Paper: Uncertainty and the geography of the Great Recession (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:harjfk:rwp15-014

Access Statistics for this paper

More papers in Working Paper Series from Harvard University, John F. Kennedy School of Government Contact information at EDIRC.
Bibliographic data for series maintained by ().