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Changes in Unemployment Duration and Labor Force Attachment

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  • Katharine G. Abraham
  • Robert Shimer

Abstract

This paper accounts for the observed increase in unemployment duration relative to the unemployment rate in the U.S. over the past thirty years, typified by the record low level of short-term unemployment. We show that part of the increase is due to changes in how duration is measured, a consequence of the 1994 Current Population Survey redesign. Another part is due to the passage of the baby boomers into their prime working years. After accounting for these shifts, most of the remaining increase in unemployment duration relative to the unemployment rate is concentrated among women, whose unemployment rate has fallen sharply in the last two decades while their unemployment duration has increased. Using labor market transition data, we show that this is a consequence of the increase in women's labor force attachment.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8513.

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Date of creation: Oct 2001
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Publication status: published as Krueger, Alan and Robert Solow (eds.) The Roaring Nineties. New York: The Russell Sage Foundation, 2002.
Handle: RePEc:nbr:nberwo:8513

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  1. John Haltiwanger & Marilyn E. Manser & Robert Topel, 1998. "Labor Statistics Measurement Issues," NBER Books, National Bureau of Economic Research, Inc, National Bureau of Economic Research, Inc, number halt98-1.
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  3. Chinhui Juhn & Kevin M. Murphy & Robert H. Topel, 1991. "Why Has the Natural Rate of Unemployment Increased over Time?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 75-142.
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  5. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(4), pages 1371-91, November.
  6. Lawrence H. Summers, 1986. "Why is the Unemployment Rate So Very High near Full Employment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 339-396.
  7. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2001. "Comparative Analysis of Labour Market Outcomes: Lessons for the US from International Long-Run Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3023, C.E.P.R. Discussion Papers.
  8. Abbring, Jaap H. & Berg, Gerard J. van den & Ours, Jan C. van, 1997. "Business cycles and compositional variation in U.S. unemployment," Serie Research Memoranda, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics 0020, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  9. Martin Browning & Thomas Crossley, . "Unemployment Insurance Benefit Levels and Consumption Changes," Canadian International Labour Network Working Papers, McMaster University 25, McMaster University.
  10. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(4), pages 75-99, Fall.
  11. Alvarez, Fernando & Jermann, Urban J., 2000. "Using Asset Prices to Measure the Cost of Business Cycles," Working Papers, University of Pennsylvania, Wharton School, Weiss Center 00-1, University of Pennsylvania, Wharton School, Weiss Center.
  12. Gruber, Jonathan, 1997. "The Consumption Smoothing Benefits of Unemployment Insurance," American Economic Review, American Economic Association, American Economic Association, vol. 87(1), pages 192-205, March.
  13. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, Elsevier, vol. 2(3), pages 225-243, September.
  14. Baker, Michael, 1992. "Digit preference in CPS unemployment data," Economics Letters, Elsevier, Elsevier, vol. 39(1), pages 117-121, May.
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