The Long and Large Decline in State Employment Growth Volatility

33 Pages Posted: 18 Apr 2007

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

Multiple version iconThere are 2 versions of this paper

Date Written: April 2009

Abstract

This study documents a general decline in the volatility of employment growth during the period 1956 to 2005 and examines its possible sources. Estimates from a state-level pooled cross-section/time-series model indicate that aggregate and state-level factors each account for an important share of the total explained variation in state-level volatility. Specifically, state-level factors have contributed as much as 16 percent, while aggregate factors are found to account for up to 46 percent of the variation. With regard to state-level factors, the share of state total employment in manufacturing and state banking deregulation each contributed significantly to fluctuations in volatility. Aggregate factors that are quantitatively important in accounting for volatility include monetary policy, the state of the national business cycle, and oil-price shocks.

Keywords: State employment, employment growth, business cycle

Suggested Citation

Carlino, Gerald A. and DeFina, Robert H. and Sill, Keith, The Long and Large Decline in State Employment Growth Volatility (April 2009). FRB of Philadelphia Working Paper No. 09-9. Available at SSRN: https://ssrn.com/abstract=980761 or http://dx.doi.org/10.2139/ssrn.980761

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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