The causes and consequences of economic restructuring: evidence from the early 21st century

Andrew Figura and William Wascher
Additional contact information
Andrew Figura: https://www.federalreserve.gov/econres/andrew-figura.htm

No 2008-41, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: A number of industries underwent large and permanent reductions in employment growth at the beginning of this decade, a process we label as restructuring. We describe how restructuring occurred and what its consequences were for the economy. In particular, we find that restructuring stemmed largely from relative demand shocks (though technology shocks were important in some industries) and that elevated levels of permanent job destruction and permanent layoffs were distinguishing features of industries subject to restructuring. In addition, most workers displaced in restructuring industries relocated to other sectors. While this process of reallocation led to large increases in productivity (and a reduction in labor?s share) in industries shedding workers, it also resulted in prolonged periods of unemployment for displaced workers. Moreover, relocating workers suffered sizable reductions in earnings, consistent with substantial losses in their specific human capital. Putting these pieces together, we estimate the cost of restructuring to have been between and 1 percent of aggregate income per year.

Keywords: Structural unemployment; Unemployment (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.federalreserve.gov/pubs/feds/2008/200841/200841abs.html (text/html)
http://www.federalreserve.gov/pubs/feds/2008/200841/200841pap.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2008-41

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().