On the Stability of Employment Growth: A Postwar View from the U.S. States

FRB of Philadelphia Working Paper No. 04-21

40 Pages Posted: 22 Nov 2004

See all articles by Gerald A. Carlino

Gerald A. Carlino

Federal Reserve Bank of Philadelphia

Robert H. DeFina

Villanova University

Keith Sill

affiliation not provided to SSRN

Date Written: October 2004

Abstract

In 1952, the average quarterly volatility of U.S. state employment growth stood at 1.5 percent. By 1995, employment growth volatility came in at just under 0.5 percent. While all states shared in the decline, some states declined much more dramatically than others. We analyze aspects of this decline using new data covering industry employment by state during the postwar period. Estimates from a pooled cross-section/time-series model corrected for spatial dependence indicate that fluctuations in state-specific and aggregate variables have both played an important role in explaining volatility trends. However, state-level differences in responses to aggregate shocks account for less of the postwar fluctuations in employment growth volatility than do state-specific forces.

Keywords: Employment volatility, diversity-stability hypothesis, regional employment

JEL Classification: E30, C31, R11

Suggested Citation

Carlino, Gerald A. and DeFina, Robert H. and Sill, Keith, On the Stability of Employment Growth: A Postwar View from the U.S. States (October 2004). FRB of Philadelphia Working Paper No. 04-21. Available at SSRN: https://ssrn.com/abstract=611563 or http://dx.doi.org/10.2139/ssrn.611563

Gerald A. Carlino (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-6434 (Phone)
215-574-4364 (Fax)

Robert H. DeFina

Villanova University ( email )

Villanova, PA 19085
United States

Keith Sill

affiliation not provided to SSRN

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