On the Stability of Employment Growth: A Postwar View from the U.S. States

June 2005

WP 04-21/R – In 1952, the average quarterly volatility of U.S. state employment growth was 1.5 percent. By 1995, it was just under 0.5 percent. While all states shared in the decline, some declined more dramatically than others.

Supersedes Working Paper 02-14

The authors analyze aspects of this decline using data covering postwar industry employment by state. Estimates from a pooled cross-section/time-series model indicate that fluctuations in macroeconomic and state-specific variables have both played an important role in explaining volatility trends. However, macroeconomic shocks account for more of the postwar fluctuations in state employment growth volatility than do state-specific forces.

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