Regional and sectoral evidence of the macroeconomic effects of labor reallocation: a panel data analysis

Bakas, D ORCID: https://orcid.org/0000-0003-4771-4505, Panagiotidis, T and Pelloni, G, 2017. Regional and sectoral evidence of the macroeconomic effects of labor reallocation: a panel data analysis. Economic Inquiry, 55 (1), pp. 501-526. ISSN 0095-2583

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Abstract

This paper revisits the sectoral shifts hypothesis by examining unemployment fluctuations for 48 U.S. states
over the period 1990:01–2011:12. We develop a panel approach that incorporates dynamics, parameter
heterogeneity, aggregate factors and cross-sectional dependence. Our findings provide support for a positive
and significant effect of the employment dispersion index on unemployment. This outcome is robust under alternative specifications and measures of employment dispersion. The empirical evidence corroborates the presence and relevance of cross-sectional dependence and heterogeneity among states. The results show that, once unobserved common factors and cross-state heterogeneity are taken into account, labor reallocation has a significant effect on unemployment that is half the size of the estimate when cross sectional dependence is not taken into account.

Item Type:	Journal article
Publication Title:	Economic Inquiry
Creators:	Bakas, D., Panagiotidis, T. and Pelloni, G.
Publisher:	Wiley-Blackwell
Date:	January 2017
Volume:	55
Number:	1
ISSN:	0095-2583
Identifiers:	Number Type 10.1111/ecin.12363 DOI
Divisions:	Schools > Nottingham Business School
Record created by:	Jonathan Gallacher
Date Added:	22 Aug 2016 09:14
Last Modified:	02 Jun 2018 03:00
URI:	https://irep.ntu.ac.uk/id/eprint/28336

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