Fluent Essays

For this box you will analyze the labor market before, during, and after the financial crisis in a minimum 1000 words.You will analyze the 2006-2016 period; these are the years that have the same unemployment rates that book-end the period, 4.7\% in both January of 2006 and in December of 2016.- Go to BLS.gov and look for 1) the Unemployment Rate; 2) Labor Force Participation Rate; and 3) hours of work (search: total private average weekly hours of all employees), this one is available starting from March of 2006.The purpose of this box is to document and explain these three indicators [25 points each indicator] during the Great Recession and unify the three measures into a single view of the labor market in the context of the financial crisis [25 points].The participation rate and hours correspond to the extensive and intensive margins, respectively. The “extensive margin” refers to whether or not to work, and the “intensive margin” refers to how many hours, once one has decided to work (in line with the labor-leisure model of the household).The box should reflect your familiarity with the concepts and the definitions. And, as always, the charts should have a title and have the axis labeled (with time in x-axis, and label variable(s) and units in the y-axis).SHORTCUT:The Federal Reserve Bank of St. Louis compiles and stores economic data from many sources, including the Bureau of Labor Statistics. One-stop shopping for the data in this box can be found here:https://fred.stlouisfed.org/ (Links to an external site.)The series are:- Unemployment Rate (UNRATE)- Labor Force Participation Rate (CIVPART)- Average Weekly Hours of All Employees, Total Private (AWHAETP)You can use the ready-made charts from FRED, though I encourage you to develop further your graphing and communication skills in Excel.Enjoy Module 4, and here is a link to the third variable that you need for the Box ---it is a bit hidden in the BLS website (in the table just tick on ‘Total private’).https://www.bls.gov/webapps/legacy/cesbtab2.htm example_box.pdf about_the_box.docx econ562_module4.pdf Unformatted Attachment Preview One–Pager | No.53 Levy Economics Institute Falling Labor Force Participation: Demographics or Lack of Jobs? of Bard College February 3, 2017   and .   President Obama stepped out of office with the longest uninterrupted streak of job creation on record, with 15.8 million private sector jobs added since 2010. However, the overall labor force participation rate (LFPR) has been falling since its historical peak in 2000. This is commonly attributed to demographics: aging of the population pulls down the LFPR due to lower participation of retirees 55 and older. Nonetheless, the share of the population aged 55 and older that continues to work has been rising, attenuating the negative impact of aging on the total LFPR. Most important, such age demographics cannot explain the falling LFPR for prime-working-age civilians (ages 25–54), which has also been falling since 2000. In particular, as can be seen in the figure below, the LFPR for prime-age male workers has been on a long-term downward trajectory since 1970. Until 2000, the strong influx of prime-age women into the workforce more than offset men’s withdrawal from the labor market. But since then, the LFPPR for both genders has declined. Today, it remains significantly below prerecessionary levels. Some have emphasized other structural forces at play. John Williams, president of the Federal Reserve Bank of San Francisco, argues that a growing percentage of younger Americans are leaving the labor force to care for children and older family members, obtain more education, or enjoy leisure, and that more generous social safety net benefits, combined with the increasing number of families with two working Prime Working Age LFPRs: Men vs. Women, January 1970 – October 2016 90 98 85 80 94 70 90 65 60 86 55 50 82 All (left scale) Men (right scale) Women (left scale) 2016-10 2012-07 2008-04 2004-01 1999-10 1995-07 1991-04 1987-01 1982-10 1978-07 1974-04 1970-01 45 Percent Percent 75 spouses, have reduced the costs associated with labor force withdrawal. Prime-age workers are more likely to drop out rather than take jobs that require inferior skill levels or pay much lower wages, according to this argument. While some of the decline in labor force participation may be due to such “social shifts” and other supply-side and institutional factors, it is unlikely that a large number of Americans are voluntarily leaving the labor force. The number of those not in the labor force who report not wanting a job now has declined for those aged 16–54. Also, participation has declined steadily for prime-age workers without children, and fewer than 25 percent of the prime-age people who are not participating in the labor force have a working spouse—and nearly 36 percent of them are living in poverty. None of these facts is obviously consistent with the “lifestyle changes” argument. Participation has fallen more steeply for less-educated men at the same time that the demand-driven wage premium for education has increased. Using wage pressure as a proxy for demand, and educational achievement as a proxy for skills, lack of demand for lower-skill workers has been an important driver of falling participation. According to President Obama’s Council of Economic Advisers, the correlation between labor force participation and relative wages is the strongest for those at the 10th percentile of the wage distribution. Depressed labor force participation for prime-age workers is likely due to a combination of insufficient aggregate demand, weak job creation, and stagnant wages—all of which have been persistent problems over the past three or four decades. While short-lived economic expansions have occasionally counteracted these trends, this temporary relief has been provided by unsustainable asset-price bubbles (dot-com stocks, commodities, housing prices) that increase fragility and do little for those at the bottom of the income ladder. Further, once the bubbles burst, we return to secular stagnation. Although insufficient aggregate demand is the main problem, general “Keynesian” pump priming is not the answer. Stimulus needs to take the form of targeted job creation to tighten labor markets for less-skilled workers. If President Trump were serious about improving the conditions of working America, he would revisit Roosevelt’s New Deal jobs programs and Hyman Minsky’s employer-of-last-resort proposal to directly create jobs where they are needed while improving public infrastructure and the provision of public services. A more detailed discussion of the issues can be found at levyinstitute.org/ publications/full-employment-are-we-there-yet.   is assistant professor of economics at the State University of New York, Cortland. .   is a senior scholar at the Levy Economics Institute. Source: BLS A “box” is a pedagogical feature used in textbooks and in technical reports. These boxes aim to expand the topic of discussion by going into greater depth, or may be meant to show the practical application of a theoretical concept (or vice-versa). Technical blogs can be thought of as boxes in terms of scope, depth, and length (see voxeu.org, for example). When writing a box target around 1000 words. The box has to introduce the topic, develop it, draw conclusions, provide sources of information, and references for further reading (when applicable). The boxes we will create will serve as learning aids for you to package and/or apply the acquired knowledge. They will steer you to expand, practice, connect, or seek complementary perspectives on a given topic. The objective is for you to synthesize, go deeper and ultimately ‘own’ the subject. In the course there is a box assignment in Modules 3 through 8. There is no pre-set format or template, you are the creator. However, the design has to be visually appealing, the writing engaging, and overall, the box should leave the reader with a sense of clarity about the importance of a topic or of the use of a concept. You are not writing for me or for you, but for a general interest audience. In summary, boxes should inform the reader about what is the question/situation under study; why is it important; what is the theoretical basis; what is the appropriate data to use; and leave them with a clear conclusion. Also, all charts should have a title and have the axis labeled (variable(s) name and units). Key words for good writing are: clarity, conciseness, continuity, and cadence. As an example, see the One-Pager (Links to an external site.) from the Levy Economics Institute on the trends on the labor force participation rate. ECON 562 Macroeconomic Analysis & Public Policy Module 4: Households Labor-Leisure Decision Copyright 2018 Montclair State University Introduction A One-Period Model of a Household Optimal Allocation of Time The Labor Supply Taxes on Labor Introduction Every day we have to decide how to allocate our time between labor and leisure. How can we model this economic decision? ECON 562 Macroeconomic Analysis & Public Policy Module 4a: A One-Period Model A One-Period Model In this module, we develop a theory of households who live for just one day. So we model how a representative household chooses: • How much to work and • How long to stay home The model’s predictions are consistent with the data. A One-Period Model In this one-period model what you earn, you consume, but you also like to rest and/or socialize. So let’s suppose that household utility for consumption 𝐶 and leisure 𝑁 is given by: 𝜽𝒍𝒏𝑪 + 𝟏 − 𝜽 𝒍𝒏𝑵 And there is a time constraint 𝑵 + 𝑳 = 𝟏𝟔, and a budget constraint 𝑪 = 𝒘𝑳. There are 16 hours in a day that can be either spent working (𝐿) or spent on leisure (𝑁). Optimal Allocation of Time Solving for 𝐿 in the time constraint and substituting 𝐿 and 𝐶 in the utility function we get: 𝜽𝒍𝒏 𝒘 + 𝜽𝒍𝒏 𝑳 + 𝟏 − 𝜽 𝟏𝟔 − 𝑳 To find the optimal choice of L, we take the derivative of this function with respect to L and set it equal to 0, 𝜽 𝟏−𝜽 − =𝟎 𝑳 𝟏𝟔 − 𝑳 This yields 𝑳 = 𝜽𝟏𝟔. Hours of work are proportional to the weight on consumption (and independent of 𝑤!) The Labor Supply So, how could it be that the wage rate does not affect the decision on hours? Wages matter, of course, but there are two opposing forces that make them ‘disappear’ from the solution of the problem: • If wages go up, your time endowment is worth more, and as you are richer you want more 𝐶 and 𝐿, that is, to work less (income effect). • But, if wages go up, the (opportunity) cost of ‘staying home’ rises, and you want less leisure and work more (substitution effect). Taxes on Labor The solution is consistent with the data! Hours worked per-capita are trendless over long-periods of time, even though wages have been increasing over time with productivity. This finding has fiscal implications. Unlike the tax on capital, which reduces the capital stock, taxes on wages don’t appear to be distortionary (based on this model specification). ... Purchase answer to see full attachment