We especially thank Pok-Sang Lam and an anonymous referee for comments and suggestions. The opinions expressed here are solely those of the authors and do not necessarily represent those of the Federal Reserve Bank of Philadelphia, the Federal Reserve System, or Villanova University.
The Long and Large Decline in State Employment Growth Volatility
Article first published online: 17 MAR 2013
© 2013 The Ohio State University
Journal of Money, Credit and Banking
Volume 45, Issue 2-3, pages 521–534, March-April 2013
How to Cite
CARLINO, G. A., DEFINA, R. and SILL, K. (2013), The Long and Large Decline in State Employment Growth Volatility. Journal of Money, Credit and Banking, 45: 521–534. doi: 10.1111/jmcb.12014
- Issue published online: 17 MAR 2013
- Article first published online: 17 MAR 2013
- Received April 23, 2007; and accepted in revised form April 6, 2011.
- state-level variation in employment growth volatility
This study documents a general decline in the volatility of employment growth during the period 1956–2002 and examines its possible sources. We use a panel design that exploits the considerable state-level variation in volatility during the period. The roles of monetary policy, oil prices, industrial employment shifts, and a coincident index of business cycle variables are explored. Overall, these four variables taken together explain as much as 31% of the fluctuations in employment growth volatility. Individually, each of the four factors is found to have significantly contributed to fluctuations in employment growth volatility, although to differing degrees.