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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. Caplin, A. & Leahy, J., 1993. "Mass Layoffs and Unemployment," Harvard Institute of Economic Research Working Papers 1666, Harvard - Institute of Economic Research.
  2. Giuseppe Bertola & Francine D. Blau & Lawrence M. Kahn, 2001. "Comparative Analysis of Labor Market Outcomes: Lessons for the US from International Long-Run Evidence," NBER Working Papers 8526, National Bureau of Economic Research, Inc.
  3. 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.
  4. 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, vol. 17(2), pages 339-396.
  5. John Haltiwanger & Marilyn E. Manser & Robert Topel, 1998. "Labor Statistics Measurement Issues," NBER Books, National Bureau of Economic Research, Inc, number halt98-1, January.
  6. Gruber, Jonathan, 1997. "The Consumption Smoothing Benefits of Unemployment Insurance," American Economic Review, American Economic Association, vol. 87(1), pages 192-205, March.
  7. Alvarez, F. & Jermann, U.J., 2000. "Using Asset Prices to Measure the Cost of Business Cycles," Weiss Center Working Papers, Wharton School - Weiss Center for International Financial Research 00-1, Wharton School - Weiss Center for International Financial Research.
  8. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
  9. Browning, Martin & Crossley, Thomas F., 2001. "Unemployment insurance benefit levels and consumption changes," Journal of Public Economics, Elsevier, vol. 80(1), pages 1-23, April.
  10. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  11. 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, vol. 22(2), pages 75-142.
  12. 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.
  13. Baker, Michael, 1992. "Digit preference in CPS unemployment data," Economics Letters, Elsevier, vol. 39(1), pages 117-121, May.
  14. Abowd, John M & Zellner, Arnold, 1985. "Estimating Gross Labor-Force Flows," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 3(3), pages 254-83, June.
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