Cyclical fluctuations and sectoral reallocation. Evidence from the PSID

Prakash Loungani; Richard Rogerson

doi:10.1016/0304-3932(89)90051-2

Cyclical fluctuations and sectoral reallocation. Evidence from the PSID

Prakash Loungani, Richard Rogerson

Research output: Contribution to journal › Article › peer-review

33 Scopus citations

Abstract

This paper documents the correlation between permanent sectoral reallocation and the business cycle using data from the Michigan Panel Study of Income Dynamics. We find that the outflow of workers from goods to services accelerates during recessions. The flow from services to stable employment in surables accelerates during booms. We also document the contribution of sectoral reallocation to total unemployment. Permanent switchers account for about a quarter of the total weeks of unemployment during booms; this proportion rises to nearly 40% duing recessions.

Original language	English (US)
Pages (from-to)	259-273
Number of pages	15
Journal	Journal of Monetary Economics
Volume	23
Issue number	2
DOIs	https://doi.org/10.1016/0304-3932(89)90051-2
State	Published - Mar 1989
Externally published	Yes

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/0304-3932(89)90051-2

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title = "Cyclical fluctuations and sectoral reallocation. Evidence from the PSID",

abstract = "This paper documents the correlation between permanent sectoral reallocation and the business cycle using data from the Michigan Panel Study of Income Dynamics. We find that the outflow of workers from goods to services accelerates during recessions. The flow from services to stable employment in surables accelerates during booms. We also document the contribution of sectoral reallocation to total unemployment. Permanent switchers account for about a quarter of the total weeks of unemployment during booms; this proportion rises to nearly 40% duing recessions.",

author = "Prakash Loungani and Richard Rogerson",

note = "Funding Information: *The authors thank Jim Adams, Larry Kenny, Walter McManus, and other participants of the Labor Economics Workshop at the University of Florida. We benefited from discussions with G.S. Maddala and from comments by Steve Davis, Bharat Trehan, and an anonymous referee on an earlier draft. Yang-Hoon Sonn provided excellent research assistance. Financial support from NSF Grant No. SES-87064690 is gratefully acknowledged.",

year = "1989",

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doi = "10.1016/0304-3932(89)90051-2",

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AU - Loungani, Prakash

AU - Rogerson, Richard

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PY - 1989/3

Y1 - 1989/3

N2 - This paper documents the correlation between permanent sectoral reallocation and the business cycle using data from the Michigan Panel Study of Income Dynamics. We find that the outflow of workers from goods to services accelerates during recessions. The flow from services to stable employment in surables accelerates during booms. We also document the contribution of sectoral reallocation to total unemployment. Permanent switchers account for about a quarter of the total weeks of unemployment during booms; this proportion rises to nearly 40% duing recessions.

AB - This paper documents the correlation between permanent sectoral reallocation and the business cycle using data from the Michigan Panel Study of Income Dynamics. We find that the outflow of workers from goods to services accelerates during recessions. The flow from services to stable employment in surables accelerates during booms. We also document the contribution of sectoral reallocation to total unemployment. Permanent switchers account for about a quarter of the total weeks of unemployment during booms; this proportion rises to nearly 40% duing recessions.

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Cyclical fluctuations and sectoral reallocation. Evidence from the PSID

Abstract

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