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Based on data from a cross section of U.S. metro areas, we show that public employment correlates negatively with … business cycle volatility, hinting at a stabilizing effect of public employment, while public wages correlate weakly and … generate wage-reducing and stabilizing effects of public employment. Without this mechanism, a search and matching model cannot …
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This paper explores the evidence for positive hysteresis in the labor market. Using data from the National Longitudinal Surveys of Youth, we find that negative labor market outcomes during high-unemployment periods are mitigated by exposure to a high-pressure economy during the preceding...
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