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

Julie Hotchkiss and Robert Moore ()

No 2018-1, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: This paper explores evidence for positive hysteresis in the labor market. Using data from the National Longitudinal Surveys of Youth, we find that negative labor market outcomes during high unemployment periods are mitigated by exposure to a high-pressure economy during the preceding expansion. Breaking total exposure into intensity and duration suggests that these two dimensions have differing impacts. However, the benefits of exposure are not enough to overcome the greater negative impact of high unemployment periods on labor market outcomes of disadvantaged groups, making extension of high-pressure economic environments efficacious in reducing labor market gaps.

Keywords: hysteresis; unemployment; labor market gaps; labor force participation; wage gaps (search for similar items in EconPapers)
JEL-codes: E24 E60 J31 J64 (search for similar items in EconPapers)
Date: 2018-06-01, Revised 2018-10-01
New Economics Papers: this item is included in nep-lma and nep-mac
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DOI: 10.29338/wp2018-1b

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Handle: RePEc:fip:fedawp:2018-01