Research

Working Papers

Robert Bernhardt, David Munro, and Erin Wolcott, May 2021

Since 2010, the share of households refusing to participate in the Current Population Survey (CPS) tripled. We show that partially responding households---households that respond to some but not all of the survey's eight panels---account for most of the rise. Leveraging the labor force status of partially responding households in the months surrounding their non-response, we find that rising refusals artificially suppressed the labor force participation rate and employment-population ratio but had little discernible effect on the unemployment rate. Economic and social changes brought about by manufacturing decline are correlated with state-level refusal rates.

Online Appendix.

Marianna Kudlyak and Erin Wolcott, May 2020

Using CPS monthly data and high-frequency state-level data from the Federal Worker Adjustment and Retraining Notification Act, we find that the pandemic layoffs in March-April 2020 were predominately temporary. This is in contrast to job loss during the most recent recessions when most layoffs were permanent. Permanent job loss triggers a protracted re-employment process and is a key factor behind slow recoveries of unemployment. We discuss risks of the pandemic layoffs turning into permanent job loss.


Marianna Kudlyak and Erin Wolcott, November 2019

We measure the aggregate skill match probability between the demand and supply of skills using an extended search and matching framework. In our framework, unemployed workers and vacancies meet randomly, but the probability of matching depends on how closely the unemployed worker's skillset aligns with the job requirements. We use data from the CPS, O*NET, and HWOL and find that the aggregate skill match probability declined during the 2007-09 recession but has since returned to pre-recession levels.


Publications

Erin L. Wolcott, Journal of Monetary Economics, 118 (2021), pp. 161-177.

Low-skilled prime-age men are less likely to be employed than high-skilled prime-age men, and the differential has increased since the 1970s. I build a search model encompassing three explanations: (1) automation and trade reduced the demand for low-skilled workers; (2) health, welfare, and recreational gaming/computer technology reduced the supply of low-skilled workers; and (3) factors affecting job search, such as online job boards, reduced frictions for high-skilled workers. I find a shift in demand away from low-skilled workers was the leading cause, a shift in supply had little effect, and search frictions actually reduced employment inequality.

Online Appendix. Data and code.

Press Coverage: The Conversation, CBS News, Middlebury Newsroom, The Middlebury Campus

Erin L. Wolcott, American Economic Association Papers and Proceedings, 110 (2020), pp. 535-540.

Foreign governments went from owning a tenth of publicly available US Treasury notes and bonds in 1985 to over half in 2008. Recently, foreign governments have reduced their positions. I find foreign official purchases have depressed medium-term yields, despite conventional wisdom pointing toward the long end of the yield curve. To examine effects over the entire yield curve, I embed a structural vector autoregression of macroeconomic variables into an affine term structure model. With segments of the yield curve increasingly determined by international financial markets, it may be more difficult for the Federal Reserve to implement its interest rate policy.

Online appendix. Data and code.

Press Coverage: Bloomberg

Erin L. Wolcott and Jon M. Conrad (Cornell University). Land Economics 87.3 (2011), pp. 403-411.

Ecologists and anthropologists have had a long-standing interest in the settlement and evolution of isolated islands, particularly Easter Island. The open access model is often used to describe the evolution of a human population and its resource base. Unfortunately, an open access model, with spiral convergence to a steady state, is inappropriate for island dynamics where the human population peaks and then goes into permanent decline. We develop more appropriate two-state and three-state models. The non-autonomous version of the three-state model, which collapses to the stable two-state model, produces dynamics that are more consistent with the history of Easter Island.

(1) Population on Easter Island with no agriculture(2) Agriculture with no erosion(3) Agriculture with irreversable erosion

Federal Reserve Publications

Erin Wolcott, Mitchell G. Ochse, Marianna Kudlyak, and Noah A. Kouchekinia, Economic Letter, FRB San Francisco, November 2020, 2020-34.