How Attached to the Labor Market Are the Long-Term Unemployed?

Robert C. Dent, Samuel Kapon, Fatih Karahan, Benjamin Pugsley and Aysegul Sahin

No 20141118, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In this second post in our series on measuring labor market slack, we analyze the labor market outcomes of long-term unemployed workers to assess their employability and labor force attachment. If long-term unemployed workers are essentially nonparticipants, their job-finding prospects and attachment to the labor force should resemble those of nonparticipants who are not looking for a job and should differ considerably from those of short-term unemployed workers. Using data that allow us to follow workers over longer time periods, we find that differences in labor market outcomes between short- and long-term unemployed workers exist, but these differences narrow at longer horizons. In contrast, labor market outcomes for the long-term unemployed are substantially different from those of nonparticipants who do not want a job.

Keywords: long-term unemployment; slack in the labor market; wage pressure (search for similar items in EconPapers)
Date: 2014-11-18
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