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Jobless Recovery: A Time Series Look at the United States
Journal article   Peer reviewed

Jobless Recovery: A Time Series Look at the United States

James DeNicco and Christopher A. Laincz
Atlantic economic journal, v 46(1), pp 3-25
01 Mar 2018
DOI: https://doi.org/10.1007/s11293-018-9569-7
Featured in Collection :   UN Sustainable Development Goals @ Drexel

Abstract

Business & Economics Economics Social Sciences
We use vector auto regression models controlling for log differences in gross domestic product (GDP), the unemployment rate, and changes in the unemployment rate to show that following a recession, the rate of decrease in the unemployment rate significantly slowed over time. Controlling for GDP growth rates, we find two structural breaks indicating weaker recoveries in the unemployment rate over time, i.e. recoveries that are increasingly jobless. The first break is in 1959, and the second is in 1984 coinciding with the usual timing of the Great Moderation. Using the 7.85% unemployment rate at the end of 2012 and assuming average annual recovery growth of 2%, the structural breaks imply an additional two full years are necessary to return to a historical long-run average of 5.5%. We empirically explore possible causes proposed in the literature including industry composition, participation rates and social benefits. Demographic shifts in the labor force and changing industry composition appear to be the strongest contributors to jobless recovery.

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16 Record Views
2 citations in Web of Science
2 citations in Scopus

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UN Sustainable Development Goals (SDGs)

This publication has contributed to the advancement of the following goals:

#1 No Poverty
#8 Decent Work and Economic Growth
#10 Reduced Inequalities

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Collaboration types
Domestic collaboration
Web of Science research areas
Economics
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