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Why don't firms hire young workers during recessions? A replication of Forsythe (The Economic Journal, 2022)

Author

Listed:
  • Jonathan Créchet

    (Department of Economics, University of Ottawa, Canada)

  • Jing Cui

    (Department of Economics, University of Ottawa, Canada)

  • Barbara Sadaba

    (Bank of Canada)

  • Antoine Sawyer

    (Department of Economics, Queen’s University)

Abstract

We replicate results of Forsythe (2022) studying the cyclicality of individuals' labor market transitions conditional on their experience. Using Current Population Survey (CPS) data and state-level variations in the unemployment rate, this paper shows that the hiring probability of youths is more sensitive to business-cycle conditions than for experienced individuals. We replicate the main results in this paper by reconstructing the dataset using data from the IPUMS-CPS database (Flood et al. (2020)) and recoding the paper's main regressions from scratch. We also conduct a robustness replicability analysis and show that the paper's main results are robust in terms of statistical significance to (i) extending the sample period from 1994-2014 to 1994-2019 and (ii) using MSA-level unemployment variation instead of state-level variation. These extensions reduce the magnitude of the main effects of interest, but the paper's key conclusions are unaffected.

Suggested Citation

  • Jonathan Créchet & Jing Cui & Barbara Sadaba & Antoine Sawyer, 2024. "Why don't firms hire young workers during recessions? A replication of Forsythe (The Economic Journal, 2022)," Working Papers 2405E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:2405e
    as

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    File URL: http://hdl.handle.net/10393/46603
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    References listed on IDEAS

    as
    1. van Ours, J.C., 2015. "The Great Recession was not so Great," Other publications TiSEM b88a88a8-c20f-4145-84c2-f, Tilburg University, School of Economics and Management.
    2. van Ours, Jan C., 2015. "The Great Recession was not so Great," CEPR Discussion Papers 10376, C.E.P.R. Discussion Papers.
    3. Christopher A. Pissarides, 2013. "Unemployment in the Great Recession," Economica, London School of Economics and Political Science, vol. 80(319), pages 385-403, July.
    4. Rivera Drew, Julia A. & Flood, Sarah & Warren, John Robert, 2014. "Making full use of the longitudinal design of the Current Population Survey: Methods for linking records across 16 months\m{1}," Journal of Economic and Social Measurement, IOS Press, issue 3, pages 121-144.
    5. Brigitte C. Madrian & Lars John Lefgren, 1999. "A Note on Longitudinally Matching Current Population Survey (CPS) Respondents," NBER Technical Working Papers 0247, National Bureau of Economic Research, Inc.
    6. Pierre Brochu & Jonathan Créchet & Zechuan Deng, 2020. "Labour Market Flows and Worker Trajectories in Canada During COVID-19," Working Papers 2005E, University of Ottawa, Department of Economics.
    7. David N. F. Bell & David G. Blanchflower, 2011. "Young people and the Great Recession," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(2), pages 241-267.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Worker flows; Business cycles; Life cycle.;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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