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A0295
Title: Gender differences in business cycle dynamics and policy implications Authors:  Amy Guisinger - Lafayette College (United States) [presenting]
Tara Sinclair - George Washington University (United States)
Abstract: While traditional macroeconomic models take individuals to be identical agents, the labor market is composed of many distinct groups that may have different reactions to policy. We compare a bivariate correlated unobserved components model against common filters in the literature to understand the business cycle dynamics of various groups. Our results show that the different filters provide conflicting results for the variability of the series components and the dominant force during recessions. According to our most general model, female unemployment is dominated by the permanent component during recession, while the transitory (or cyclical) component plays a larger role for male unemployment. Therefore, policy enacted to target either structural or cyclical unemployment will have unequal effects in reducing unemployment across genders. These results are robust to different disaggregate specifications and data simulations. Therefore, since males and females have separate and distinctive reactions to macroeconomic shocks, then policy may have unintentionally unequal effects.