Huanan XuFollow

Date of Completion

7-15-2016

Embargo Period

7-15-2016

Keywords

unemployment, business cycle, labor force, labor dynamics, transition

Major Advisor

Kenneth Couch

Associate Advisor

Delia Furtado

Associate Advisor

Robert Fairlie

Field of Study

Economics

Degree

Doctor of Philosophy

Open Access

Open Access

Abstract

Using individual-level CPS data matched across adjacent months from 1996 to 2013, my dissertation examines the differences in labor market transitions to changes in the business cycle by various demographic groups. The papers capture economic fluctuations by measuring deviations in local demand from national economic circumstances and examine monthly transitions among employment, unemployment, and nonparticipation. By relating the underlying transitions to the labor force aggregates, this dissertation aims to provide insights on the drivers of gaps in labor force aggregates. The first chapter examines the racial differences in cyclical sensitivities between the white, black, and Hispanic workers. The second chapter breaks the sample by young vs. old workers to examine labor market dynamics. The third chapter focuses on comparing the immigrant-native labor market performances. The main findings are minority and immigrant workers appear to be first-fired and first-hired over the business cycle, while younger workers are first-fired and last-hired. After controlling for the observable personal, skill, and employment characteristics, the remaining unemployment gap may be attributable to potential discrimination, different levels of U.S.-specific human capitals, and the eligibility for participation in public benefit programs. To test the structural change brought by the 2007 Great Recession, the papers find a secular shift in the base transition probability that would negatively affect all workers in the sample, and at the same time there is a decline in the cyclical volatility for less-advantaged workers in the post-Great Recession period.

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