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Labour reallocation and unemployment fluctuations: A tale of two tails

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  • Dimitrios Bakas
  • Theodore Panagiotidis
  • Gianluigi Pelloni

Abstract

This paper examines the sectoral shifts hypothesis for the US regional labour market using a quantile panel framework. We use a monthly panel dataset that spans over 1990–2016 for the 48 US states and employ a dynamic quantile panel data regression approach to investigate the asymmetric nature of the relationship between sectoral labour reallocation and unemployment fluctuations. The empirical evidence suggests that the impact of the employment dispersion index is relatively small and insignificant for lower levels of unemployment but becomes positive and highly significant for higher rates. Our findings bear out the asymmetry of reallocation disturbances for the US labour market.

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  • Dimitrios Bakas & Theodore Panagiotidis & Gianluigi Pelloni, 2024. "Labour reallocation and unemployment fluctuations: A tale of two tails," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3444-3468, July.
    • Handle: RePEc:wly:ijfiec:v:29:y:2024:i:3:p:3444-3468
    DOI: 10.1002/ijfe.2845
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    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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