TY  - JOUR
AU  - Jaimovich,Nir
AU  - Pruitt,Seth
AU  - Siu,Henry E.
TI  - The Demand for Youth: Implications for the Hours Volatility Puzzle
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14697
PY  - 2009
Y2  - January 2009
UR  - http://www.nber.org/papers/w14697
L1  - http://www.nber.org/papers/w14697.pdf
N1  - Author contact info:
Nir Jaimovich
Department of Economics
Duke University
213 Social Services Building
Durham, NC 27708
Tel: 919/660-1864
E-Mail: njaimo@gmail.com

Seth Pruitt
Federal Reserve Board
20th St & Constitution Ave NW
Washington, DC 20551
Tel: 202-452-2344
Fax: 202-452-6424
E-Mail: seth.j.pruitt@frb.gov

Henry E. Siu
Department of Economics
University of British Columbia
1873 East Mall #997
Vancouver, BC V6T 1Z1
CANADA
CANADA
Tel: 604/822-2919
Fax: 604/822-5915
E-Mail: hankman@mail.ubc.ca
AB  - The employment and hours worked of young individuals fluctuate much more over the business cycle than those of prime-aged individuals. Understanding the mechanism underlying this observation is key to explaining the volatility of aggregate hours over the cycle. We argue that the joint behavior of age-specific hours and wages in the U.S. data point to differences in the cyclical characteristics of labor demand. To articulate this view, we consider a production technology displaying capital-experience complementarity. We estimate the key parameters governing the degree of complementarity and show that the model can account for the behavior of age-specific hours and wages while generating a series of aggregate hours that is nearly as volatile as output.
ER  -