Economic Quarterly

January 8, 2010

Richmond Fed's Economic Quarterly Examines Sectoral Employment and the Business Cycle

Richmond, Va.

Heterogeneity in Sectoral Employment and the Business Cycle by Nadezhda Malysheva and Pierre-Daniel G. Sarte

At the aggregate level, employment can be well explained by a relatively small number of factors. But when individual sectors are examined, things are quite different, according to findings by Richmond Fed economist Pierre-Daniel Sarte and research assistant Nadezhda Malysheva. Their results suggest that across all goods and services, common shocks explain on average only 31 percent of the variation in sectoral employment. "In other words, employment at the sectoral level is driven mostly by idiosyncratic shocks, rather than common shocks, to the different sectors," the authors write. 

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Also in the Fall 2009 issue:

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond’s Research Department--Publications at 800-322-0565.

The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.


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