Demographic Differences in Cyclical Employment Variation

This paper examines the demographic patterns of cyclical swmgs in the labor market by decomposing movements in employment into changes in unemployment and participation.Differences in labor market experience by age, sex, race, and enrollment in school are considered, and implications for .aggregatedemand policy are assessed.The results confirm the iJrportance of the participation rate in affecting the cyclical behavior of both employment and une.1T!Ployment.A key finding is that young workers bear a disproportionate share of cyclical fluctuations.Moreover, the evidence suggests that the e.1T!Ployment experience of high unemployment demographic groups appears to be insensitive to aggregate demand conditions because of the surge in participation which accompanies increased e.1T!Ployment opportunities.Without participation fluctuation, expansionary .aggregatedemand could reduce the UTIe.1T!Ployment rate of almost every demographic group to a very low level.