Are the Job Flow Responses to Oil Price Shocks Asymmetric?

This paper investigates the dynamic responses of employment flows to oil price shocks for the U.S. Manufacturing sector in the post-1973 period. Using the latest available data and state-of-the-art econometric methods of estimation and inference, I formally test for asymmetries in responses of job flows to positive and negative oil price innovations --- an issue that has recently been brought into the spotlight of academic debate. In addition to the recently developed impulse response function (IRF) based Wald test, this paper suggests performing a nonparametric IRF-density-based test of asymmetry, which is unconditional of the magnitude of oil price shocks as well as able to account for their relative likelihood. This permits inference about a general tendency of asymmetries in impulse responses. I find strong evidence in favor of asymmetric responses of manufacturing job flows to oil price shocks both on the aggregate and industry group levels