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Job polarization and the natural rate of unemployment in the United States

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  • Tüzemen, Didem

Abstract

I present a new estimate of the natural rate of unemployment in the United States that accounts for changes in the age, gender, and skill composition of the labor force. Using micro-level data from the Current Population Survey for the period 1994–2017, I find that the natural rate of unemployment has declined by 0.5 percentage point since 1994 and was 4.5% at the end of 2017. My projections show that ongoing demographic and technological changes could lower the trend rate further to 4.4% by the end of 2022.

Suggested Citation

  • Tüzemen, Didem, 2019. "Job polarization and the natural rate of unemployment in the United States," Economics Letters, Elsevier, vol. 175(C), pages 97-100.
    • Handle: RePEc:eee:ecolet:v:175:y:2019:i:c:p:97-100
    DOI: 10.1016/j.econlet.2018.12.011
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    References listed on IDEAS

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    1. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," American Economic Review, American Economic Association, vol. 96(2), pages 189-194, May.
    2. Didem Tuzemen & Jonathan L. Willis, 2013. "The vanishing middle: job polarization and workers’ response to the decline in middle-skill jobs," Economic Review, Federal Reserve Bank of Kansas City, vol. 98(Q I), pages 5-32.
    3. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    4. Daniel Aaronson & Luojia Hu & Arian Seifoddini & Daniel G. Sullivan, 2015. "Changing Labor Force Composition and the Natural Rate of Unemployment," Chicago Fed Letter, Federal Reserve Bank of Chicago.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Natural rate of unemployment; Job polarization; Labor demand; Skills; Aging;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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