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Job Flows, Demographics and the Great Recession

Author

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  • Eva Sierminska
  • Yelena Takhtamanova

Abstract

The recession the United States economy entered in December of 2007 is considered to be the most severe downturn the country has experienced since the Great Depression. The unemployment rate reached as high as 10.1 percent in October 2009 - the highest we have seen since the 1982 recession. In this paper we examine the severity of this recession compared to those in the past by examining worker flows into and out of unemployment taking into account changes in the demographic structure of the population. We identify the most vulnerable groups of this recession by dissagregating the workforce by age, gender and race. We find that adjusting for the aging of the U.S. labor force increases the severity of this recession. Our results indicate that the increase in the unemployment rate is driven to a larger extent by the lack of hiring (low outflows), but flows into unemployment are still important for understanding unemployment rate dynamics (they are not as acyclical as some literature suggests) and differences in unemployment rates across demographic groups. We find that this is indeed a "mancession," as men face higher job separation probabilities, lower job finding probabilities and, as a result, higher unemployment rates than women. Lastly, there is some evidence that blacks suffered more than whites (again, this difference is particularly pronounced for men).

Suggested Citation

  • Eva Sierminska & Yelena Takhtamanova, 2010. "Job Flows, Demographics and the Great Recession," Discussion Papers of DIW Berlin 1042, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1042
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    Cited by:

    1. Takhtamanova, Yelena F. & Sierminska, Eva, 2016. "Impact of the Great Recession on Industry Unemployment: A 1976-2011 Comparison," IZA Discussion Papers 10340, Institute for the Study of Labor (IZA).
    2. Piazzalunga, Daniela & Di Tommaso, Maria Laura, 2015. "The increase of gender wage gap in Italy during the 2008-2012 economic crisis," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201532, University of Turin.
    3. Daniela Piazzalunga & Maria Laura Di Tommaso, 2015. "The increase of the gender wage gap in Italy during the 2008-2012 economic crisis," Working Papers 381, ECINEQ, Society for the Study of Economic Inequality.
    4. Gillian Kingston & Frances McGinnity & Philip J. O’Connell, 2013. "Discrimination in the Irish Labour Market: Nationality, Ethnicity and the Recession," Working Papers 201323, Geary Institute, University College Dublin.
    5. Stephan HUMPERT, 2015. "Gender-based Segregation before and after the Great Recession," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(605), W), pages 53-62, Winter.
    6. Yelena Takhtamanova & Eva Sierminska, 2012. "Distributional Impact of the Great Recession on Industry Unemployment for 1976-2011," Discussion Papers of DIW Berlin 1233, DIW Berlin, German Institute for Economic Research.
    7. Hilary Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012. "Who Suffers during Recessions?," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 27-48, Summer.

    More about this item

    Keywords

    Unemployment; Worker flows; Job Finding Rate; Separation Rate; Demographics; Gender;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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