Accounting for unemployment in the Great Recession: nonparticipation matters

Marianna Kudlyak and Felipe Schwartzman

No 12-04, Working Paper from Federal Reserve Bank of Richmond

Abstract: We conduct an accounting exercise of the role of worker flows between unemployment, employment, and labor force nonparticipation in the dynamics of the aggregate unemployment rate across four recent recessions: 1982-1983, 1990-1991, 2001, and 2007-2009 (the \"Great Recession\"). We show that, whereas during earlier recessions it was sufficient to examine the flows between employment and unemployment to account for the dynamics of the unemployment rate, this was not true in the Great Recession. The increased importance of the flows between nonparticipation and unemployment is documented across all age and gender groups.

Keywords: Business cycles; Unemployment; Labor market (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-lab and nep-mac
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Citations: View citations in EconPapers (17)

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