A0357
Title: The transitory component of health care employment
Authors: Luiggi Donayre - University of Minnesota - Duluth (United States) [presenting]
Lacey Loomer - University of Minnesota - Duluth (United States)
Abstract: U.S. healthcare employment is decomposed into permanent and transitory components to study the short-run properties of the deviation of healthcare employment from its long-run trend and to understand its correlation with the aggregate business cycle for the 1990-2023 period. To do so, we consider a battery of linear and nonlinear time series models that appropriately address the outlier observations associated with the COVID-19 pandemic. Based on this model-based approach, we find empirical support for the presence of asymmetries in the behavior of the transitory component of healthcare employment. Because several alternative specifications produce a similar fit, but generate measures with different shapes and depths, we construct a model-average measure to address model-based uncertainty. This estimated transitory component exhibits a moderately positive correlation with measures of the aggregate business cycle, suggesting that healthcare employment responds to overall economic conditions only partially. Furthermore, this correlation varies over time, indicating that recessions are not all alike in their effect on the healthcare sector.
