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Regional and Sectoral Evidence of the Macroeconomic Effects of Labor Reallocation: A Panel Data Analysis

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  • D. Bakas
  • T. Panagiotidis
  • G. Pelloni

Abstract

This paper re-examines Lilien s sectoral shifts hypothesis for U.S. unemployment. We employ a monthly panel that spans from 1990:01 to 2011:12 for 48 U.S. states. Panel unit root tests that allow for crosssectional dependence reveal the stationarity of unemployment. Within a framework that takes into account dynamics, parameter heterogeneity and cross-sectional dependence in the panel, we show that sectoral reallocation is significant not only at the aggregate level but also at the state level. The magnitude and the statistical significance of the latter as measured by Lilien s index increases when both heterogeneity and cross-sectional dependence are taken into account.

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  • D. Bakas & T. Panagiotidis & G. Pelloni, 2013. "Regional and Sectoral Evidence of the Macroeconomic Effects of Labor Reallocation: A Panel Data Analysis," Working Papers wp902, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:wp902
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    3. Asmae Beladel & Radouane Raouf, 2022. "Impact assessment of job reallocation on unemployment in Morocco: An ARDL approach," African Development Review, African Development Bank, vol. 34(4), pages 500-512, December.
    4. Stijepic, Denis, 2019. "On development paths minimizing the aggregate labor-reallocation costs in the three-sector framework and an application to structural policy," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203519, Verein für Socialpolitik / German Economic Association.
    5. Xu, Mo & Tao, Changqi & Zou, Xianya, 2024. "How do technology and institutional adaptability promote sustainable economic entrepreneurship and growth?," Journal of Business Research, Elsevier, vol. 172(C).
    6. Bakas, Dimitrios & Panagiotidis, Theodore & Pelloni, Gianluigi, 2016. "On the significance of labour reallocation for European unemployment: Evidence from a panel of 15 countries," Journal of Empirical Finance, Elsevier, vol. 39(PB), pages 229-240.

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple 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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