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Potential Effects of the Great Recession on the U.S. Labor Market

  • William T. Dickens EMAIL logo and Robert K. Triest
Published/Copyright: October 25, 2012
The B.E. Journal of Macroeconomics
From the journal The B.E. Journal of Macroeconomics Volume 12 Issue 3

Abstract

The effect of the Great Recession on the U.S. labor market will likely persist even after economic output has recovered. Although the Great Recession did not greatly change the relative probabilities of job loss for different types of workers, the long-run impact will vary by worker characteristics. Workers who lost long-term jobs during the recession are at increased risk of future job loss due to the loss of protection afforded by long job tenure, and older displaced workers are at relatively high risk of prolonged spells of unemployment and premature retirement. The recent increase in the job vacancy rate with relatively little change in the unemployment rate suggests a decrease in the efficiency of job matching and an increase in the NAIRU. However, this phenomenon may pass once aggregate demand has increased enough to bring vacancy rates back within their normal range and extended unemployment insurance programs have expired.

The views expressed in this paper are those of the authors, and do not represent the views of the Federal Reserve Bank of Boston or of the Federal Reserve System. Gary Burtless and Bart Hobijn provided valuable comments. Thanks to Jamie Fogel for helpful comments and for outstanding assistance with the SIPP data analysis. Thanks also to Tess Forsell, Matthew Jordan, Marie Lekkas, Elizabeth Meyer, Shaun O’Brian, and Irena Tsvetkova for their help in preparing this paper.
Published Online: 2012-10-25

© 2012 by Walter de Gruyter GmbH & Co.

Articles in the same Issue

  1. Introduction
  2. A Conference Overview
  3. Session 1
  4. The Statistical Behavior of GDP after Financial Crises and Severe Recessions
  5. First Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  6. Second Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  7. Session 2
  8. Shifting Confidence in Homeownership: The Great Recession
  9. First Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  10. Second Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  11. Session 3
  12. Potential Effects of the Great Recession on the U.S. Labor Market
  13. First Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  14. Second Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  15. Session 4
  16. The Future of U.S. Housing Finance Reform
  17. First Discussant Comment on “The Future of U.S. Housing Finance Reform”
  18. Second Discussant Comment on “The Future of U.S. Housing Finance Reform”
  19. Session 5
  20. Fiscal Policy as a Stabilization Tool
  21. First Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  22. Second Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  23. Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis? A Panel Discussion
  24. First Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  25. Second Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  26. Third Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  27. Speeches
  28. Global Financial Intermediaries: Lessons and Continuing Challenges
  29. The Effects of the Great Recession on Central Bank Doctrine and Practice
https://doi.org/10.1515/1935-1690.107

Articles in the same Issue

  1. Introduction
  2. A Conference Overview
  3. Session 1
  4. The Statistical Behavior of GDP after Financial Crises and Severe Recessions
  5. First Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  6. Second Discussant Comment on “The Statistical Behavior of GDP after Financial Crises and Severe Recessions”
  7. Session 2
  8. Shifting Confidence in Homeownership: The Great Recession
  9. First Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  10. Second Discussant Comment on “Shifting Confidence in Homeownership: The Great Recession”
  11. Session 3
  12. Potential Effects of the Great Recession on the U.S. Labor Market
  13. First Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  14. Second Discussant Comment on “Potential Effects of the Great Recession on the U.S. Labor Market”
  15. Session 4
  16. The Future of U.S. Housing Finance Reform
  17. First Discussant Comment on “The Future of U.S. Housing Finance Reform”
  18. Second Discussant Comment on “The Future of U.S. Housing Finance Reform”
  19. Session 5
  20. Fiscal Policy as a Stabilization Tool
  21. First Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  22. Second Discussant Comment on “Fiscal Policy as a Stabilization Tool”
  23. Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis? A Panel Discussion
  24. First Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  25. Second Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  26. Third Panelist Remarks: “Will the Federal Reserve Be Able to Serve as the Lender of Last Resort in the Next Financial Crisis?”
  27. Speeches
  28. Global Financial Intermediaries: Lessons and Continuing Challenges
  29. The Effects of the Great Recession on Central Bank Doctrine and Practice
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