Explaining cyclical movements in employment
Subtitle: creative destruction or changes in utilization
By: Andrew Figura
Series: Finance and economics discussion series -- 2006-23; Finance and economics discussion series (Online) -- 2006-23.
Publisher: Federal Reserve Board
Published: 2006
Place of publication: Washington, D.C
Language: eng
Format: [electronic resource] :
Description: "An important step in understanding why employment fluctuates cyclically is determining the relative importance of cyclical movements in permanent and temporary plant-level employment changes.  If movements in permanent employment changes are important, then recessions are times when the destruction of job specific capital picks up and/or investment in new job capital slows.  If movements in temporary employment changes are important, then employment fluctuations are related to the temporary movement of workers across activities (e.g., from work to home production or search and back again) as the relative costs/benefits of these activities change.  I estimate that in the manufacturing sector temporary employment changes account for approximately 60 percent of the change in employment growth over the cycle.  However, if permanent employment changes create and destroy more capital than temporary employment changes, then their economic consequences would be relatively greater.  The correlation between gross permanent employment changes and capital intensity across industries supports the hypothesis that permanent employment changes do create and destroy more capital than temporary employment changes"--Federal Reserve Board web site.
Notes: Title from PDF file as viewed on 12/7/2006.

Includes bibliographical references.

Also available in print.

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Mode of access: World Wide Web.