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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