Re: Unemployment Curve?

[Alan G Isaac <aisaac@xxxxxxxxxxxx>]

On Tue, 13 Aug 2002 20:30:08 EDT Helmet4000@xxxxxxx wrote:
> After I control for what I mentioned above, plus industrial and demographic
> composition, I was examining the impact of unemployment rates on earnings
> inequality.  The best fit is a quadratic specification which suggests an
> inverted U-shape relation between unemployment and annual earnings
> inequality.  As unemployment goes up, earnings inequality goes up but at the
> highest levels earnings inequality goes down again.

Undoubtedly you will get responses from some labor
economists on the list, and I am not one.  But from what you
wrote I would hazard a guess that your result is being drive
by poor counties with high unemployment and no other
significant (internal) class structure.  You might try
controlling for average income.

Cheers,
Alan Isaac

PS List etiquette is to turn off HTML.
   http://www.american.edu/cas/econ/htmlmail.htm