Measures of Persistence and Imperfect Responsiveness
Note: Persistence is defined as the sum of deviations from the base path when unemployment is subjected to a temporary shock. Absolute persistence sums absolute deviations. Imperfect responsiveness sums deviations from the base path after subtracting the change in the long-run equilibrium resulting from subjecting unemployment to a permanent shock. Both measures are standardized by the size of the shock, which is a 1 percent reduction in labor demand. The sources of persistence and imperfect responsiveness are calculated by leading all lagged terms (setting L-kxt-k) of the source variable while leaving all other lags intact.
|Employment lags, employment equation||-0.21||-2.38||6.91|
|Employment lags, wage equation||-2.02||-0.90||37.56|
|Wage lags, wage equation||0.07||0.31||43.96|
|Labor supply lags plus interaction effects||2.16||4.27||-78.49|