Labor-supply shifts and economic fluctuations

Yongsung Chang, Frank Schorfheide

Research output: Contribution to journalArticle

44 Citations (Scopus)

Abstract

We propose a new VAR identification scheme that distinguishes shifts of and movements along the labor demand schedule to identify labor-supply shocks. According to our VAR analysis of post-war US data, labor-supply shifts account for about 30 percent of the variation in hours and about 15 percent of the output fluctuations at business cycle frequencies. To assess the role of labor-supply shifts in a more structural framework, estimates from a dynamic general equilibrium model with stochastic variation in home production technology are compared to those from the VAR.

Original languageEnglish
Pages (from-to)1751-1768
Number of pages18
JournalJournal of Monetary Economics
Volume50
Issue number8
DOIs
Publication statusPublished - 2003 Nov

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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