Employment hysteresis from the great recession
This paper uses US local areas as a laboratory to test for long-term impacts of the Great Recession. In administrative longitudinal data, I estimate that exposure to a 1 percentage point larger 2007–9 local unemployment shock reduced 2015 working-age employment rates by over 0.3 percentage points. R...
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| Format: | Article |
| Language: | English |
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University of Chicago Press
2019
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| Online Access: | View Fulltext in Publisher |
| Summary: | This paper uses US local areas as a laboratory to test for long-term impacts of the Great Recession. In administrative longitudinal data, I estimate that exposure to a 1 percentage point larger 2007–9 local unemployment shock reduced 2015 working-age employment rates by over 0.3 percentage points. Rescaled, this long-term recession impact accounts for over half of the 2007–15 US age-adjusted employment decline. Impacts were larger among older and lower-earning individuals and typically involved a layoff but are present even in a mass-layoffs sample. Disability insurance and out-migration yielded little income replacement. These findings reveal that the Great Recession imposed employment and income losses even after unemployment rates signalled recovery. © 2019 by The University of Chicago. All rights reserved. |
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| ISBN: | 00223808 (ISSN) |
| DOI: | 10.1086/701809 |