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.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18386.
Date of creation: Sep 2012
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Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
- 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)
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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
- John C. Williams, 2013. "The economy and monetary policy in uncertain times," Speech, Federal Reserve Bank of San Francisco, issue Jan. 14.
- Rinne, Ulf & Zimmermann, Klaus F., 2013. "Is Germany the North Star of Labor Market Policy?," IZA Discussion Papers 7260, Institute for the Study of Labor (IZA).
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