EVALUATING THE IMPACT OF THE LABOR MARKET CONDITIONS INDEX ON LABOR MARKET FORECASTS (WITH ALICE SHEEHAN), REVISIONS SUBMITTED TO STUDIES IN NONLINEAR DYNAMICS AND ECONOMETRICS
This paper examines the usefulness of the Labor Market Conditions Index (LMCI) in forecasting key labor market variables, particularly unemployment rates. Using a number of models, we compare out-of-sample forecasts of the unemployment rate with the LMCI to those without the LMCI. We also estimate models of the disaggregated unemployment rates by gender, race, and race by gender, with and without the LMCI, to identify disparities in the predictive power of the LMCI for different subgroups. Last, to determine how the LMCI performs in the presence of labor market shocks, we compare the forecasting performance of the LMCI during recessionary periods and expansionary periods. Out results confirm the potential usefulness of the LMCI as a parsimonious forecasting tool; we find that the LMCI generally improves unemployment forecasts. But, disparities exist in the predictive power of the index across subpopulations and the index forecasts slightly better during recessionary periods than expansionary periods.
WHO CREATES STABLE JOBS? EVIDENCE FROM BRAZIL (WITH PETER BRUMMUND), UNDER REVIEW
In contrast to the notion that small businesses fuel job creation, recent work shows that young firms and start- ups contribute more to job creation in the US economy than do small firms (Haltiwanger et al., 2013). However, young firms and start-ups are inherently volatile, potentially leading to high employment turnover and lower levels of job stability. In this paper, we first replicate the Haltiwanger et al. (2013) job creation analysis using data from Brazil and compare the results to those for the United States. Consistent with the results for the U.S., we find that firm age is a more important determinant of job creation in Brazil than is firm size; young firms and firm-start ups create a relatively high number of jobs in both Brazil and the US. However, young firms are also more likely to exit the market in both countries. We, therefore, condition the job creation analysis on stable jobs to determine what types of firms create stable jobs in Brazil. We find that young firms and large firms create the most stable jobs in Brazil.
THE EFFECT OF A TRADE SHOCK ON GENDER-SPECIFIC LABOR MARKET OUTCOMES IN BRAZIL (JOB MARKET PAPER)
Countries around the world continue to open their borders to international trade, creating both winners and losers in the process. In this paper, I analyze the impact of a trade shock on gender-specific local labor market outcomes in Brazil. Using an instrumental variable approach and panel data for the formal labor market in Brazil, I estimate the effect of both increasing imports from China and increasing exports to China on male and female labor market outcomes in Brazil. Increased exports are associated with slight improvements in women's relative employment position in Brazil; however, increased imports lead to wage declines for both men and women. Improvements in the gender wage gap in Brazil are due to declining male wage growth, rather than positive female wage growth, in response to trade with China.
LABOR MARKET CONSEQUENCES OF EXPORT COMPETITION WITH CHINA: THE CASE OF BRAZIL (WITH PETER BRUMMUND)
With the continued trend of world economic integration, countries have recently experienced some push back on trade openness policies due to the belief that imports harm domestic production and workers. The trade and labor literature often focuses on the negative effects of imports and a smaller branch studies the positive effects of exports. In this paper, we analyze the impact of a third trade channel, export competition in third markets, on labor market reallocation in Brazil. We use a constant-market shares extension to estimate the effect of Brazil's declining export market share in select third markets attributed to China's increasing market share on local labor market outcomes in Brazil. This paper contributes to the emerging literature on the impact of China's rise by linking the level of export competition with China in other markets on labor market outcomes in Brazil, a country of similar size and endowments.