Date of Award

4-2019

Degree Name

Doctor of Philosophy

Department

Economics

First Advisor

Dr. Wei-Chiao Huang

Second Advisor

Dr. Matthew Higgins

Third Advisor

Dr. Kevin Corder

Keywords

cyclical factors, structural factors, unemployment, FAVAR model, education-occupation mismatch, immigrants’ participation

Abstract

Analyzing the factors that determine any labor market’s outcomes is important. That is because the results of these analyses can help policy makers to adopt effective labor market policies, and thus achieve the best outcomes of that labor market. In this study, I analyze three important factors: unemployment, education-occupation mismatch, and immigrants’ participation in the US labor market.

First, I analyze the problem of slow decline in the rate of U.S. unemployment after the last recessions. In this chapter, I examine whether the slow movement in U.S. unemployment is due to cyclical or structural factors. I contribute to the literature by using a FAVAR approach to investigate the relative contribution of cyclical and structural factors in U.S. unemployment.

The results show that the cyclical factors (GDP growth and vacancy) can explain about 60% of the forecast error variance of unemployment. The structural factors can explain about 16%. About 20% of unemployment is not explained through these results; this percentage of unemployment could be due to the increase in frictional unemployment. These results, in general, indicate that cyclical factors have more contribution than structural factors in the movement of the U.S. unemployment, which is in line with the literature. However, the results indicate that the FAVAR approach can provide better results by reducing the estimation bias.

Next, I examine the effect of business cycles on the Education-Occupation relationship in the US labor market. I also investigate and analyze the factors that lead to Education-Occupation mismatch problem in the US labor market. The results of this chapter indicate that Education-Occupation mismatch exists in the US labor market. The results also indicate that the business cycles can affect the Education-Occupation relationship in the US labor market.

Finally, I study immigrants’ participation in the US labor market. This is important because some immigrant workers can benefit the labor market, while others can create problems (e.g. costs). Therefore, it is necessary to formulate economic policies that help in managing and balancing the benefits and costs of immigrants’ participation in the US labor market.

The main goal of this chapter is to identifies the policies’ targets (immigrant groups that are more likely to participate in the US labor market than other immigrant groups). Identifying the policies’ targets can be used as starting point of adopting effective economic policies.

The results show that there are 62 groups of immigrants in the sample from different areas around the world. The results indicate that being from the West Indies, Philippines, and Africa increase the probability of participation in the US labor force relative to US workers. The increase in the probabilities of participation of individuals from these areas are the highest relative to the probabilities of participation of other immigrants groups in the sample.

Therefore, immigrants from the West Indies, Philippines, and Africa are identified as policy targets, and we may place more focus on immigrants from these areas when adopt economic policies. In addition, we may also focus on immigrant groups that have a high number of immigrants in the US, even though their probabilities of participation are not the highest.

Access Setting

Dissertation-Open Access

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Economics Commons

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