The employment dynamics of different population groups over the business cycle

Abstract

We use Bayesian VARs to analyze differences in employment dynamics across population groups in the US. The employment of males, young people, non-whites, the less educated, and workers in blue-collar occupations fluctuates more heavily. We further document across-group differences in the timing of employment reactions to business-cycle shocks. Groups with stronger fluctuations are affected early in the transmission process. Furthermore, we disentangle between the effects of different shocks. Supply shocks primarily drive differences between occupations, genders, age groups, and education groups. Demand shocks are important for the dynamics of employment ratios between races and ethnic origins.