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Potential effects of the Great Recession on the U.S. labor market

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  • William T. Dickens
  • Robert K. Triest

Abstract

The effect of the Great Recession on the U.S. labor market will likely persist even after economic output has recovered. Although the recession did not greatly change the relative probabilities of job loss for different types of workers, the long-run impact will vary by worker characteristics. Workers who lost long-term jobs during the Great Recession are at increased risk of future job loss due to the loss of protection afforded by long-term job tenure, and older displaced workers are at a relatively high risk of prolonged spells of unemployment and premature retirement. The recent increase in the job vacancy rate with relatively little change in the unemployment rate suggests a decrease in the efficiency of job matching and an increase in the NAIRU. However, this phenomenon may pass once aggregate demand has increased enough to bring vacancy rates back within their normal range and extended unemployment insurance programs have expired.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Boston in its series Working Papers with number 12-9.

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Date of creation: 2012
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Handle: RePEc:fip:fedbwp:12-9

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Keywords: Recessions ; Labor market;

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References

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Cited by:
  1. David G. Blanchflower & Andrew J. Oswald, 2013. "Does High Home-Ownership Impair the Labor Market?," Working Paper Series WP13-3, Peterson Institute for International Economics.

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