IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v32y2018i2p237-258.html
   My bibliography  Save this article

Changes in cyclical patterns of the USA labor market: from the perspective of nonlinear Okun’s law

Author

Listed:
  • Jong-seok Oh

Abstract

The validity of Okun’s law has been debated because of the increase in cyclicality in aggregate hours after 1985. To investigate this, I measure Okun’s coefficients in three phases of the business cycle – recession, early, and late expansions. I found that an increased coefficient for aggregate hours is due to the increased responsiveness of the employment rate during late expansions and to the increased responsiveness of hours per employee during early expansions. These findings question the flexible labor market hypothesis focusing on firms’ firing behaviors during recessions. Rather, working hours’ flexibility represents a more prominent feature of the post-1985 USA labor market.

Suggested Citation

  • Jong-seok Oh, 2018. "Changes in cyclical patterns of the USA labor market: from the perspective of nonlinear Okun’s law," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(2), pages 237-258, March.
    • Handle: RePEc:taf:irapec:v:32:y:2018:i:2:p:237-258
    DOI: 10.1080/02692171.2017.1339023
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/02692171.2017.1339023
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692171.2017.1339023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thor Hultgren, 1965. "Cost, Prices, and Profits: Their Cyclical Relations," NBER Books, National Bureau of Economic Research, Inc, number hult65-1.
    2. Susanto Basu & Miles S. Kimball, 1997. "Cyclical Productivity with Unobserved Input Variation," NBER Working Papers 5915, National Bureau of Economic Research, Inc.
    3. Reich, Michael, 2012. "The Rising Strength of Management, High Unemployment and Slow Growth: Revisiting Okun’s Law," Institute for Research on Labor and Employment, Working Paper Series qt8sc8s1z1, Institute of Industrial Relations, UC Berkeley.
    4. Wesley Clair Mitchell, 1927. "Business Cycles: The Problem and Its Setting," NBER Books, National Bureau of Economic Research, Inc, number mitc27-1.
    5. repec:cdl:indrel:qt35g487jh is not listed on IDEAS
    6. Wesley Clair Mitchell, 1927. "Introductory pages to "Business Cycles: The Problem and Its Setting"," NBER Chapters, in: Business Cycles: The Problem and Its Setting, pages -23, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mindaugas Butkus & Laura Dargenyte-Kacilevièiene & Kristina Matuzevièiute & Janina Šeputiene & Dovile Rupliene, 2023. "Age- and Gender-specific Output-employment Relationship across Economic Sectors," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 71(1), pages 3-22, January.
    2. Bod’a, Martin & Považanová, Mariana, 2021. "Output-unemployment asymmetry in Okun coefficients for OECD countries," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 307-323.
    3. Zambrano-Monserrate, Manuel A., 2024. "Labor dynamics and unions: An empirical analysis through Okun's Law," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 613-628.
    4. Mindaugas BUTKUS & Laura DARGENYTE-KACILEVICIENE & Kristina MATUZEVICIUTE & Dovile RUPLIENE & Janina SEPUTIENE, 2024. "Are there more than three regimes in the output-unemployment relationship? A panel quantile regression estimates of Okun's gap model in EU countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 15, pages 201-218, June.
    5. Stefan Ederer & Stefan Schiman-Vukan, 2018. "Produktion und Produktivität. Kaldor-Verdoorn-Effekte in der Sachgütererzeugung in Österreich und der EU," WIFO Monatsberichte (monthly reports), WIFO, vol. 91(1), pages 53-61, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivier J. Blanchard & Mark W. Watson, 1986. "Are Business Cycles All Alike?," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 123-180, National Bureau of Economic Research, Inc.
    2. Alejandro López-Vera & Andrés D. Pinchao-Rosero & Norberto Rodríguez-Niño, 2018. "Non-Linear Fiscal Multipliers for Public Expenditure and Tax Revenue in Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 36(85), pages 48-64, April.
    3. Grigoraş, Veaceslav & Stanciu, Irina Eusignia, 2016. "New evidence on the (de)synchronisation of business cycles: Reshaping the European business cycle," International Economics, Elsevier, vol. 147(C), pages 27-52.
    4. Stéphane Dupraz & Emi Nakamura & Jón Steinsson, 2019. "A Plucking Model of Business Cycles," NBER Working Papers 26351, National Bureau of Economic Research, Inc.
    5. Selin Sayek & David D. Selover, 2002. "International Interdependence and Business Cycle Transmission between Turkey and the European Union," Southern Economic Journal, John Wiley & Sons, vol. 69(2), pages 206-238, October.
    6. Domian, Dale L. & Louton, David A., 1997. "A threshold autoregressive analysis of stock returns and real economic activity," International Review of Economics & Finance, Elsevier, vol. 6(2), pages 167-179.
    7. Arthur F. Burns, 1969. "The Nature and Causes of Business Cycles," NBER Chapters, in: The Business Cycle in a Changing World, pages 3-53, National Bureau of Economic Research, Inc.
    8. Rothman Philip A, 2008. "Reconsideration of the Markov Chain Evidence on Unemployment Rate Asymmetry," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 12(3), pages 1-18, September.
    9. Robert W. Dimand, 2012. "The Roots of the Present are in the Past: The Relation of Postwar Developments in Macroeconomics to Interwar Business Cycle and Monetary Theory," Chapters, in: Thomas Cate (ed.), Keynes’s General Theory, chapter 5, Edward Elgar Publishing.
    10. Karamé, Frédéric, 2015. "Asymmetries and Markov-switching structural VAR," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 85-102.
    11. Tamotsu Onozaki, 2018. "Nonlinearity, Bounded Rationality, and Heterogeneity," Springer Books, Springer, number 978-4-431-54971-0, December.
    12. Agnès Labrousse & Sandrine Michel, 2017. "Accumulation regimes," Post-Print hal-01719977, HAL.
    13. David Laidler, 2013. "Professor Fisher and the quantity theory -- a significant encounter," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 20(2), pages 174-205, April.
    14. Silva, Aldy Fernandes da & Weffort, Elionor Farah Jreige & Flores, Eduardo da Silva & Silva, Glauco Peres da, 2014. "Gerenciamento de resultados e crises econômicas no mercado de capitais brasileiro," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 54(3), May.
    15. Sinclair Tara M, 2009. "Asymmetry in the Business Cycle: Friedman's Plucking Model with Correlated Innovations," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 14(1), pages 1-31, December.
    16. Mach Łukasz & Dąbrowski Ireneusz & Wotzka Daria & Frącz Paweł, 2023. "The Identification of Seasonality in the Housing Market Using the X13-ARIMA-SEATS Model," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 27(4), pages 29-43, December.
    17. Marlon Fritz & Thomas Gries & Yuanhua Feng, 2019. "Growth Trends and Systematic Patterns of Booms and Busts‐Testing 200 Years of Business Cycle Dynamics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 81(1), pages 62-78, February.
    18. Pablo Mejía-Reyes & Reyna Vergara-González, 2017. "Are More Severe Recessions Followed by Stronger Early Expansions of Employment in the Mexican States?," The Review of Regional Studies, Southern Regional Science Association, vol. 47(3), pages 243-269, Fall.
    19. Peter Martey Addo & Monica Billio & Dominique Guegan, 2012. "Studies in Nonlinear Dynamics and Wavelets for Business Cycle Analysis," Documents de travail du Centre d'Economie de la Sorbonne 12023r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Nov 2013.
    20. Travis J. Berge & Shu-Chun Chen & Hsieh Fushing & Òscar Jordà, 2010. "A chronology of international business cycles through non-parametric decoding," Research Working Paper RWP 11-13, Federal Reserve Bank of Kansas City.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:32:y:2018:i:2:p:237-258. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.