Labor Reallocation: Panel Evidence from U.S. States

Dimitrios Bakas, Theodore Panagiotidis and Gianluigi Pelloni

Working Paper series from Rimini Centre for Economic Analysis

Abstract: This paper re-examines Lilien’s sectoral shifts hypothesis for U.S. unemployment. We employ a monthly panel that spans from 1990:01 to 2011:12 for 48 U.S. states. Panel unit root tests that allow for cross-sectional dependence reveal the stationarity of unemployment. Within a framework that takes into account dynamics, parameter heterogeneity and cross-sectional dependence in the panel, we show that sectoral reallocation is significant not only at the aggregate level but also at the state level. The magnitude and the statistical significance of the latter as measured by Lilien’s index increases when both heterogeneity and cross-sectional dependence are taken into account.

Keywords: Unemployment; Sectoral Shifts; Employment Fluctuations; Dynamic Panel Data; Parameter Heterogeneity; Cross-Sectional Dependence (search for similar items in EconPapers)
JEL-codes: C33 E24 E32 J21 R23 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-lab
References: View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:26_13

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