Labor force composition and aggregate fluctuations

Abstract

Labor composition by gender, age, and education has undergone dramatic changes over the last forty years in the United States. Furthermore, the volatility of total market hours differs systematically between genders, age groups, and education groups. I develop a large-scale business cycle model, along with a new computation method, and show that these changes in labor composition account for up to 30% of the observed changes in aggregate volatility over this period of time.