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Age cohort effects on unemployment in the USA: Evidence from the regional level
Author(s) -
Ochsen Carsten
Publication year - 2021
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12599
Subject(s) - unemployment , economics , demographic economics , cohort effect , panel data , cohort , unemployment rate , contrast (vision) , population , labour economics , demography , econometrics , medicine , economic growth , sociology , artificial intelligence , computer science
Since the early 1970s, it was argued that shifts from relatively smaller to larger youth cohorts in the labor force raise the unemployment rate. In contrast, using US state‐level data, two studies come to a contrary conclusion. I provide a theoretical framework for local labor markets that considers age cohort differences in labor market characteristics. Using a spatial panel data model and US county‐level data (2000–2014), the estimates provide strong evidence that aging of the working‐age population reduces overall unemployment by almost 1 percentage point. Long‐run effects that consider local feedbacks are even larger.