The United States Labor Market: Status Quo or A New Normal?
AbstractThe recession of 2007-09 witnessed high rates of unemployment that have been slow to recede. This has led many to conclude that structural changes have occurred in the labor market and that the economy will not return to the low rates of unemployment that prevailed in the recent past. Is this true? The question is important because central banks may be able to reduce unemployment that is cyclic in nature, but not that which is structural. An analysis of labor market data suggests that there are no structural changes that can explain movements in unemployment rates over recent years. Neither industrial nor demographic shifts nor a mismatch of skills with job vacancies is behind the increased rates of unemployment. Although mismatch increased during the recession, it retreated at the same rate. The patterns observed are consistent with unemployment being caused by cyclic phenomena that are more pronounced during the current recession than in prior recessions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18386.
Date of creation: Sep 2012
Date of revision:
Note: LS PE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-22 (All new papers)
- NEP-LAB-2012-09-22 (Labour Economics)
- NEP-LTV-2012-09-22 (Unemployment, Inequality & Poverty)
- NEP-MAC-2012-09-22 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hilary W. Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012.
"Who Suffers During Recessions?,"
NBER Working Papers
17951, National Bureau of Economic Research, Inc.
- Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-93, August.
- Jesse Rothstein, 2012.
"The Labor Market Four Years Into the Crisis: Assessing Structural Explanations,"
NBER Working Papers
17966, National Bureau of Economic Research, Inc.
- Jesse Rothstein, 2012. "The Labor Market Four Years into the Crisis: Assessing Structural Explanations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 65(3), pages 437-500, July.
- Rothstein, Jesse, 2012. "The Labor Market Four Years Into the Crisis: Assessing Structural Explanations," Institute for Research on Labor and Employment, Working Paper Series qt2x576316, Institute of Industrial Relations, UC Berkeley.
- Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2010.
"The Establishment-Level Behavior of Vacancies and Hiring,"
NBER Working Papers
16265, National Bureau of Economic Research, Inc.
- Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2013. "The Establishment-Level Behavior of Vacancies and Hiring," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 581-622.
- Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2009. "The establishment-level behavior of vacancies and hiring," Working Papers 09-14, Federal Reserve Bank of Philadelphia.
- Abraham, Katharine G. & Katz, Lawrence F., 1986.
"Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?,"
3442781, Harvard University Department of Economics.
- Abraham, Katharine G & Katz, Lawrence F, 1986. "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 507-22, June.
- Katharine G. Abraham & Lawrence F. Katz, 1987. "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?," NBER Working Papers 1410, National Bureau of Economic Research, Inc.
- Daniel Aaronson & Jonathan Davis & Luojia Hu, 2012. "Explaining the decline in the U.S. labor force participation rate," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Mar.
- Kyle F. Herkenhoff & Lee E. Ohanian, 2011. "Labor Market Dysfunction During the Great Recession," NBER Working Papers 17313, National Bureau of Economic Research, Inc.
- Fernando Ferreira & Joseph Gyourko & Joseph Tracy, 2011.
"Housing Busts and Household Mobility: An Update,"
NBER Working Papers
17405, National Bureau of Economic Research, Inc.
- Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
- Marcello M. EstevÃ£o & Evridiki Tsounta, 2011. "Has the Great Recession Raised U.S. Structural Unemployment?," IMF Working Papers 11/105, International Monetary Fund.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Monetary or fiscal stimulus can help only if unemployment is cyclical; otherwise, if unemployment is structural expansionary policies will lead only to inflation. Careful recent analyses indicate that unemployment is mainly cyclical in the US
by Blog Admin in British Politics and Policy at LSE on 2012-10-24 16:00:33
- Given the enormity of the short- and long-run fiscal challenges facing the US, the lack of policy detail from both presidential candidates is disappointing
by Blog Admin in British Politics and Policy at LSE on 2012-10-25 13:00:36
- Robert J. Gordon, 2013. "The Phillips Curve is Alive and Well: Inflation and the NAIRU During the Slow Recovery," NBER Working Papers 19390, National Bureau of Economic Research, Inc.
- Peter Diamond, 2013.
"Cyclical Unemployment, Structural Unemployment,"
IMF Economic Review,
Palgrave Macmillan, vol. 61(3), pages 410-455, August.
- Peter A. Diamond, 2013. "Cyclical Unemployment, Structural Unemployment," NBER Working Papers 18761, National Bureau of Economic Research, Inc.
- Peter A. Diamond, 2013. "Cyclical Unemployment, Structural Unemployment," CESifo Working Paper Series 4130, CESifo Group Munich.
- Peter Diamond, 2013. "Cyclical unemployment, structural unemployment," Working Papers 13-5, Federal Reserve Bank of Boston.
- Menzie Chinn & Laurent Ferrara & Valérie Mignon, 2013.
"Post-Recession US Employment through the Lens of a Non-Linear Okun's Law,"
2013-13, CEPII research center.
- Menzie D. Chinn & Laurent Ferrara & Valérie Mignon, 2013. "Post-recession US Employment through the Lens of a Non-linear Okun’s law," NBER Working Papers 19047, National Bureau of Economic Research, Inc.
- Menzie Chinn & Laurent Ferrara & Valérie Mignon, 2013. "Post-recession US employment through the lens of a non-linear Okun’s law," EconomiX Working Papers 2013-12, University of Paris West - Nanterre la Défense, EconomiX.
- Neil Mehrotra & Dmitriy Sergeyev, 2013. "Sectoral Shocks, the Beveridge Curve and Monetary Policy," 2013 Meeting Papers 919, Society for Economic Dynamics.
- Olivier Blanchard & Florence Jaumotte & Prakash Loungani, 2014. "Labor market policies and IMF advice in advanced economies during the Great Recession," IZA Journal of Labor Policy, Springer, vol. 3(1), pages 1-23, December.
- Ulf Rinne & Klaus F Zimmermann, 2013.
"Is Germany the North Star of Labor Market Policy?,"
IMF Economic Review,
Palgrave Macmillan, vol. 61(4), pages 702-729, December.
- Weshah Razzak, 2014.
"New Zealand Labour Market Dynamics: Pre- and Post-global Financial Crisis,"
Treasury Working Paper Series
14/03, New Zealand Treasury.
- Razzak, Weshah, 2013. "New Zealand Labour Market Dynamics Pre- and post-global financial crisis," MPRA Paper 52462, University Library of Munich, Germany.
- repec:fip:fedfsp:y:2013:i:jan.14 is not listed on IDEAS
- Summerfield, Fraser, 2014. "Labor Market Conditions, Skill Requirements and Education Mismatch," CLSSRN working papers clsrn_admin-2014-19, Vancouver School of Economics, revised 28 Apr 2014.
- Richard B. Freeman, 2013. "Failing the Test? The Flexible U.S. Job Market in the Great Recession," NBER Working Papers 19587, National Bureau of Economic Research, Inc.
- John C. Williams, 2013. "The economy and monetary policy in uncertain times," Speech 115, Federal Reserve Bank of San Francisco.
- Valletta, Robert G., 2013. "House lock and structural unemployment," Labour Economics, Elsevier, vol. 25(C), pages 86-97.
- Philippe Bergevin, . "Still Standing in Line: Addressing a Mismatch of Skills and Jobs in the Canadian Labour Market," e-briefs 154, C.D. Howe Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.