Archive

Archive for the ‘Federal Reserve Board’ Category

Labor Force Participation: Recent Developments and Future Prospects

September 24, 2014 Comments off

Labor Force Participation: Recent Developments and Future Prospects
Source: Federal Reserve Board

Since 2007, the labor force participation rate has fallen from about 66 percent to about 63 percent. The sources of this decline have been widely debated among academics and policymakers, with some arguing that the participation rate is depressed due to weak labor demand while others argue that the decline was inevitable due to structural forces such as the aging of the population. In this paper, we use a variety of approaches to assess reasons for the decline in participation. Although these approaches yield somewhat different estimates of the extent to which the recent decline in participation reflects cyclical weakness rather than structural factors, our overall assessment is that much – but not all – of the decline in the labor force participation rate since 2007 is structural in nature. As a result, while we see some of the current low level of the participation rate as indicative of labor market slack, we do not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve.

About these ads

Offshoring, Mismatch, and Labor Market Outcomes

September 23, 2014 Comments off

Offshoring, Mismatch, and Labor Market Outcomes (PDF)
Source: Federal Reserve Board

We study the role of labor market mismatch in the adjustment to a trade liberalization that results in the offshoring of high-tech production. Our model features two-sided heterogeneity in the labor market: high- and low-skilled workers are matched in a frictional labor market with high- and low-tech firms. Mismatch employment occurs when high-skilled workers choose to accept a less desirable job in the low-tech industry. The main result is that–perhaps counter-intuitively–this type of job displacement is actually beneficial for the labor market in the country doing the offshoring. Mismatch allows the economy to reallocate domestic high-skilled labor across both high- and low-tech industries. In doing so, mismatch dampens both the increase in the aggregate unemployment rate and the decline in aggregate wages that come as a consequence of shifting domestic production abroad.

Federal Reserve Board publishes report containing summary information on debit card transactions in 2013

September 19, 2014 Comments off

Federal Reserve Board publishes report containing summary information on debit card transactions in 2013
Source: Federal Reserve Board

The Federal Reserve Board on Thursday published a report containing summary information on the volume and value, interchange fee revenue, certain issuer costs, and fraud losses related to debit card transactions in 2013. The report is the third in a series to be published every two years pursuant to section 920 of the Electronic Fund Transfer Act (EFTA).

The Board’s Regulation II (Debit Card Interchange Fees and Routing), which implements this provision of the EFTA, provides that a debit card issuer subject to the interchange fee standard (a covered issuer) may not receive an interchange fee that exceeds 21 cents plus 5 basis points multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible. The interchange fee standard does not apply to debit card issuers with consolidated assets of less than $10 billion, certain government-administered debit cards, and certain prepaid cards. The interchange fee standard became effective on October 1, 2011.

As in prior years, covered issuers’ costs of authorizing, clearing, and settling (ACS) debit card transactions, excluding issuer fraud losses, varied greatly across respondents in 2013, with the median issuer having an average ACS cost of 14.9 cents and the issuer at the 75th percentile having an average ACS cost of 42.2 cents. Issuers with the highest debit card transaction volume generally had the lowest ACS costs per transaction as reflected in an overall average of 4.4 cents per transaction, down from 5 cents per transaction in 2011. Conversely, issuers with the smallest debit card programs generally had the highest ACS costs per transaction.

The Board estimated debit-card fraud losses to all parties (merchants, cardholders, and issuers) to be $1.57 billion in 2013, with an average loss of approximately 8 basis points as a share of transaction value, up slightly from 2011. The median covered issuer’s average fraud loss as a share of transaction value was 5 basis points, up slightly from 4.7 basis points in 2011. The median covered issuer had average fraud prevention and data security costs of slightly more than 1.4 cents per transaction.

Beige Book – September 3, 2014

September 9, 2014 Comments off

Beige Book – September 3, 2014
Source: Federal Reserve Board

Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report; however, none of the Districts pointed to a distinct shift in the overall pace of growth. The New York, Cleveland, Chicago, Minneapolis, Dallas, and San Francisco Districts characterized their growth rates as moderate; Philadelphia, Atlanta, St. Louis, and Kansas City reported modest growth. Boston reported that business activity appeared to be improving, and Richmond reported further strengthening. Philadelphia, Atlanta, Chicago, Kansas City, and Dallas explicitly reported that contacts in their Districts generally remained optimistic about future growth; most of the other Districts cited various examples of ongoing optimism from specific sectors.

State Mandated Financial Education and the Credit Behavior of Young Adults

September 8, 2014 Comments off

State Mandated Financial Education and the Credit Behavior of Young Adults
Source: Federal Reserve Board

In the U.S., a number of states have mandated personal finance classes in public school curricula to address perceived deficiencies in financial decision-making competency. Despite the growth of financial and economic education provided in public schools, little is known about the effect of these programs on the credit behaviors of young adults. Using a panel of credit report data, we examine young adults in three states where personal financial education mandates were implemented in 2007: Georgia, Idaho, and Texas. We compare the credit scores and delinquency rates of young adults in each of these states pre- and post-implementation of the education to those of students in a synthetic control state and then bordering states without financial education. We find that young people who are in school after the implementation of a financial education requirement have higher relative credit scores and lower relative delinquency rates than those in control states.

Job Search Before and After the Great Recession

September 3, 2014 Comments off

Job Search Before and After the Great Recession
Source: Federal Reserve Bank of Cleveland

Since the onset of the Great Recession, unemployment rates have been high and job-finding rates have been low. These persistent trends raise concerns that unemployed workers may have become discouraged by poor job prospects. To begin understanding the job searching behavior of the unemployed, we examine data from the American Time Use Survey (ATUS) and find that a greater proportion of the unemployed are spending time searching for a job after the Great Recession than before. We also find important differences in job search time by educational attainment, age, and gender—including decreases in search time for some groups.

To compare the amount of time the unemployed spend on their job search before and after the recession, we analyzed data from the ATUS, which asks respondents how much time they spent on various activities the previous day. Activities classified as job searching include sending out resumes, conducting interviews, commuting, asking for information, and looking for information on the internet or in the newspaper. We compared ATUS data on job searching before and after the Great Recession, combining the years 2003 to 2007 for the pre-recession period and the years 2008 to 2012 for the post-recession period.

As we would expect, the proportion of unemployed individuals who spent some time on an average day searching for a job increased from 20 percent to 24 percent after the recession. However, and perhaps surprisingly, among those unemployed who did search, the average time spent on job search looked very similar in the five years on either side of the Great Recession.

The Prevalence of Apprenticeships in Germany and the United States

August 22, 2014 Comments off

The Prevalence of Apprenticeships in Germany and the United States (PDF)
Source: Federal Reserve Bank of Richmond

The educational systems and labor markets of Germany and the United States take different approaches to preparing young people for the workforce. One feature of Germany’s workforce development model that has been of interest to policymakers in the United States is the important role played by employer-financed apprenticeships. The United States instead relies mainly on comprehensive general education, with career training largely taking place in community colleges and other postsecondary institutions. Research has pointed to several factors that may foster apprenticeships in Germany to a greater extent than in the United States, including labor-market conditions, social norms, and other circumstances.

Follow

Get every new post delivered to your Inbox.

Join 928 other followers