Age and gender differentials in unemployment and hysteresis

We use a time-varying panel unobserved components model to estimate unemployment gaps disaggregated by age and gender. Recessions before COVID affected men’s labor market outcomes more than women’s; however, the reverse was true for the COVID recession, with effects amplified for younger workers. We...

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Bibliographic Details
Published in:Studies in nonlinear dynamics and econometrics 2024-09, Vol.28 (4), p.567-581
Main Authors: Guisinger, Amy Y., Jackson, Laura E., Owyang, Michael T.
Format: Article
Language:English
Subjects:
Age differences
C32
COVID-19
E24
Gender
Heterogeneity
Hysteresis
Labor
Labor market
natural rate of unemployment
Phillips curve
Recessions
Retirement
Secondary schools
time varying parameters
Unemployment
Workers
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Summary:We use a time-varying panel unobserved components model to estimate unemployment gaps disaggregated by age and gender. Recessions before COVID affected men’s labor market outcomes more than women’s; however, the reverse was true for the COVID recession, with effects amplified for younger workers. We introduce time-variation in both the hysteresis dynamics and the Phillips-curve coefficients on labor market slack. The aggregate Phillips curve flattens over time and hysteresis is countercyclical for all groups. We find heterogeneity in both the Phillips curve and hysteresis coefficients, with wages responding more to workers with an outside option (high school- and retirement-age) and larger effects of hysteresis for younger workers.
ISSN:1558-3708
1081-1826
1558-3708
DOI:10.1515/snde-2022-0068