TY  - JOUR
AU  - Davis,Steven J.
AU  - Haltiwanger,John
TI  - Sectoral Job Creation and Destruction Responses to Oil Price Changes
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7095
PY  - 1999
Y2  - April 1999
UR  - http://www.nber.org/papers/w7095
L1  - http://www.nber.org/papers/w7095.pdf
N1  - Author contact info:
Steven J. Davis
Booth School of Business
The University of Chicago
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-7312
Fax: 773/834-0733
E-Mail: Steven.Davis@ChicagoBooth.edu

John C. Haltiwanger
Department of Economics
University of Maryland
College Park, MD 20742
Tel: 301/405-3504
Fax: 301/405-3542
E-Mail: haltiwan@econ.umd.edu
AB  - We study the effects of oil price changes and other shocks on the creation and destruction of U.S. manufacturing jobs from 1972 to 1988.  We find that oil shocks account for about 20-25 percent of the cyclical variability in employment growth under our identifying assumptions, twice as much as monetary shocks. Employment growth shows a sharply asymmetric response to oil price ups and downs, in contrast to the prediction of standard equilibrium business cycle models.  The two-year employment response to an oil price increase rises (in magnitude) with capital intensity, energy intensity, and product durability.  Job destruction shows much greater short-run sensitivity to oil and monetary shocks than job creation in every sector with the clear exception of young, small plants.  Oil shocks also generate important reallocative effects.  For example, we estimate that job reallocation rose by 11 percent of employment over 3-4 years in response to the 1973 oil shock.  More than 80 percent of this response reflects greater job reallocation activity within manufacturing.
ER  -