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

50 Pages Posted: 1 Feb 2018 Last revised: 21 Feb 2019

See all articles by Julie L. Hotchkiss

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta; Georgia State University - Department of Economics

Robert Elijah Moore

Georgia State University - Andrew Young School of Policy Studies

Multiple version iconThere are 2 versions of this paper

Date Written: 2018-06-01

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

JEL Classification: E24, E60, J31, J64

Suggested Citation

Hotchkiss, Julie L. and Moore, Robert Elijah, Some Like it Hot: Assessing Longer-Term Labor Market Benefits from a High-Pressure Economy (2018-06-01). FRB Atlanta Working Paper No. 2018-1. Available at SSRN: https://ssrn.com/abstract=3113872 or http://dx.doi.org/10.29338/wp2018-1b

Julie L. Hotchkiss (Contact Author)

Federal Reserve Bank of Atlanta ( email )

Research Department
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Georgia State University - Department of Economics ( email )

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Robert Elijah Moore

Georgia State University - Andrew Young School of Policy Studies ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-3756 (Phone)
404-651-4985 (Fax)

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