Population-Employment Models: Stationarity, Cointegration, and Dynamic Adjustment

.  Population and employment in the 50 United States are found to be non‐stationary and cointegrated. Vector error correction (VEC) models exhibit dynamics with adjustment to shocks essentially completed in 30–35 years. This contrasts with adjustment periods between one and two centuries for non‐sta...

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Bibliographic Details
Published inJournal of regional science Vol. 46; no. 2; pp. 205 - 244
Main Author Hunt, Gary L.
Format Journal Article
LanguageEnglish
Published Oxford, UK; Malden, USA Blackwell Publishing Ltd/Inc 01.05.2006
Regional Science Research Institute
Wiley Blackwell
Blackwell Publishers Inc
SeriesJournal of Regional Science
Subjects
America
Bgi / Prodig
Demographic change
Economic dynamics
Economic growth
Economic models
Employment
Human geography
Population
Regional studies
Science
Statistical analysis
Studies
U.S.A
United States of America
United States of America
United States > US
USA
Model
Population
Correlation
Mathematical model
Fitting
Employment
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Summary:.  Population and employment in the 50 United States are found to be non‐stationary and cointegrated. Vector error correction (VEC) models exhibit dynamics with adjustment to shocks essentially completed in 30–35 years. This contrasts with adjustment periods between one and two centuries for non‐stationary models specified in levels. These dynamic adjustment patterns support the hypothesis that relatively long adjustment periods and slow dynamics are probably the spurious results of using non‐stationary levels of population and employment outside of a VEC model framework. Recommendations for modeling the population–employment relationship are offered based on the findings reported.
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ISSN:0022-4146
1467-9787
DOI:10.1111/j.0022-4146.2006.00439.x