1. Labor supply and the business cycle: The "bandwagon worker effect".
- Author
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Martín‐Román, Ángel L., Cuéllar‐Martín, Jaime, and Moral, Alfonso
- Subjects
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BUSINESS cycles , *LABOR supply , *LABOR market , *SOCIAL influence , *ECONOMETRICS - Abstract
The relationship between labour force participation and the business cycle is a common topic in economic literature. However, few studies have examined if the cyclical sensitivity of labour force participation is influenced by social effects. In this paper, we construct a theoretical model defining a relatively new hypothesis, the bandwagon worker effect (BWE). We use spatial econometrics techniques to test the existence of the BWE in the local labour markets in Spain. Our results reveal a positive spatial dependence in the cyclical sensitivity of labour force participation that decreases as we fix a laxer neighbourhood criterion, which verifies the existence of the BWE. [ABSTRACT FROM AUTHOR]
- Published
- 2020
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