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Jobless Recoveries: Causes and Consequences



June 2009 and overall economic activity has exhibited signs of recovery, labor market conditions remain disappointing. Payroll employment has been recovering slowly; the average duration of unemployment remains at a historical high; and the unemployment rate is projected to remain above 7.8 percent until 2013. 1 Economists are concerned that the U.S. economy is mired in another jobless recovery —when economic activity experiences growth but the unemployment rate remains high. To determine the severity of current joblessness, it is useful to compare the current state of the labor market with that during previous economic recoveries. The figure
Jobless Recoveries:
Causes and Consequences
economic downturns experience a large,
negative and persistent eect to their lifetime
opportunities. Young workers who enter the
job market during a jobless recovery may
experience temporary unemployment and
are more likely to accept less-attractive and
lower-skill jobs due to limited opportunities.
On average, their initial wage is signicantly
lower than the initial wage of their counter-
parts who graduate when the job market is
strong. is disadvantage persists; even 15
years aer graduation, their wages and career
attainment remain lower than those of their
luckier counterparts.
e social consequences of a prolonged
jobless period may be as signicant as the
economic consequences. For example, the
majority of studies on unemployment and
crime suggest that a high unemployment rate
is positively linked to increases in property
crime.4 What is more, economists Naci
Mocan and Turan Bali found that the connec-
tion between joblessness and property crime
is asymmetric: An increase in the unemploy-
ment rate is accompanied by soaring property
crime, while a decline in the unemployment
rate is followed by only a gradual drop in
property crime. Serious property crimes may
further damage the economic development
and social welfare in urban areas, especially
in inner-city neighborhoods.
A recent study by economists Dhaval
Dave and Inas Rashad Kelly found that an
increase in the unemployment rate results
in negative changes in eating habits among
a studied group of people with a high risk of
unemployment. A 1 percent increase in the
unemployment rate is associated with a 2-4
percent reduction in the consumption of fruit
and vegetables. Such a reduction in healthy
food potentially aects workers’ health in the
long run. In low-income families, inadequate
nutrition could aect the physical and mental
development of children; the stress that aects
the jobless parents also aects their children.
e welfare of children in some communi-
ties could be further undermined because a
high unemployment rate may aect family
stability by reinforcing the retreat from
marriage.5 In less-auent communities,
economic status has been a requirement for
marriage. Less-educated people are even
less likely to have a job when the unemploy-
ment rate is high. Because of that, they nd
it harder to meet the material threshold for
marrying. Persistent joblessness may result
in a permanent cultural change in some com-
munities if marriage becomes a luxury good.
A Long Road Ahead
Federal Reserve Chairman Ben Bernanke
said last fall that job creation is probably
the most important problem facing the U.S.
economy.6 As of January 2011, the U.S.
economy needed roughly 6.8 million jobs to
return to a 5 percent natural unemployment
rate.7 is estimate is more complicated if
population growth, the discouraged worker
eect and the extension of unemployment
benets are taken into account.
Unemployed individuals who stop looking
for a job are called discouraged workers and
are not considered part of the labor force.
Discouraged workers may re-enter the labor
market when the economic activity bounces
back. A massive re-entry would temporarily
raise the number of unemployed workers so
that the unemployment rate could remain
unchanged or rise even as payroll employ-
ment increases.
An extension of unemployment insurance
would probably produce mixed eects on
the job market.8 Such an extension could
improve the eciency of matching workers
with appropriate jobs. On the other hand,
extended benets could discourage jobless
workers from accepting unattractive jobs,
thus keeping the unemployment rate rela-
tively high.
Taking these additional factors into
account, if the economy immediately gener-
ates 350,000 jobs a month—the pace of the late
1990s—four years would be needed to reach
an unemployment rate of 5 percent, whereas
at a rate of 210,000 jobs a month—the 2005
pace—11 years would be needed to achieve a
5 percent unemployment rate.9 Regardless, the
current recovery may be remembered as the
third consecutive, and likely the most severe,
jobless recovery. e social consequences may
be as painful as economic consequences. A
generation of childhoods, career paths, eating
habits and marriage culture may be perma-
nently altered.
Natalia Kolesnikova is an economist and
Yang Liu is a research associate at the Federal
Reserve Bank of St. Louis. See http://research. for more on
Kolesnikova’s work.
Although the Great Recession ended in
June 2009 and overall economic activity
has exhibited signs of recovery, labor market
conditions remain disappointing. Payroll
employment has been recovering slowly; the
average duration of unemployment remains at
a historical high; and the unemployment rate
is projected to remain above 7.8 percent until
2013.1 Economists are concerned that the U.S.
economy is mired in another jobless recovery
—when economic activity experiences growth
but the unemployment rate remains high.
To determine the severity of current job-
lessness, it is useful to compare the current
state of the labor market with that during
previous economic recoveries. e gure
shows the U.S. unemployment rate during
the past four recoveries alongside the current
recovery. In the rst two cases, shortly aer
the 1973-75 and 1981-82 recessions ended,
the unemployment rate started to decline;
15 months aer the end of these two reces-
sions, the unemployment rate had dropped
to signicantly lower levels. ese were not
considered jobless recoveries. In contrast, in
the wake of the two recessions in the 1990s
and early 2000s, the unemployment rate con-
tinued to increase 15 months aer the end of
the recessions. ese were jobless recoveries.
Current developments in the labor market
are similar to the jobless recovery cases. Since
the Great Recession ended in June 2009, the
unemployment rate has remained high. It
topped 10 percent in late 2009, remained
above 9.4 percent in 2010 and was still at
8.9 percent in February 2011—much higher
than during any other recovery since the
1970s. Persistent and unusually high unem-
ployment suggests that this jobless recovery
might be more painful than the previous two.
–12 –9 –6 –3 0 3 6 9 12 15 18 21 24
2001 Current
Unemployment Rates after Recent Recessions
SOURCE: U.S . Bureau of Labor Sta tistics
Potential Causes of a Jobless Recovery
Many researchers have pointed to a labor
market mismatch as one of the reasons for
persistently high unemployment. Job growth
polarization, industrial reallocation and
organizational restructuring create a severe
mismatch between available workers and
appropriate job opportunities. Unemployed
workers are forced to look for jobs in dierent
occupations, industries and locations.
MIT Professor David Autor examined
U.S. employment opportunities over the
past three decades. He found that the U.S.
employment growth has polarized into
relatively high-skill, high-wage jobs and
low-skill, low-wage jobs while middle-skill
routine jobs have diminished. Some routine
jobs, such as administrative and operative
positions, have been replaced by computer
automation. Other routine jobs, such as
bill-processing and manufacturing positions,
have been moved overseas to take advantage
of lower wages. e Great Recession acceler-
ated this trend: Employment in middle-skill
and middle-wage occupations declined 7-17
percent during the recession.2
Job opportunities were also signicantly
reallocated between industries, suggests
a study by economists Erica Groshen and
Simon Potter. e 2007-09 nancial turmoil
and housing crisis had severe impacts on
industrial structure: During the recession,
employment in the construction industry
dropped 20 percent, and job opportunities
in the nancial industry declined 6 percent.
ese industries continued to shrink aer the
recovery began. By December 2010, payroll
employment dropped an additional 7 percent
in construction and 2 percent in the nancial
industry. Manufacturing and information
service industries were also badly aected.
Demand in these industries may never return
to prerecession levels; a portion of their job
losses are likely to be permanent.
Organizational restructuring, which leads
to an elimination of unneeded labor, espe-
cially by small rms, also creates structural
change in job opportunities. During the
Great Recession, small rms lost proportion-
ately more jobs than larger rms: e small
rms accounted for about 10 percent of total
net job loss despite their 5.3 percent employ-
ment share.3 Small rms also take longer
than large rms to rehire. Moreover, small
rms are more likely to close during eco-
nomic contraction; some of their job losses
might be considered permanent. Re-creating
these jobs takes more time than rehiring.
Consequences of a Jobless Recovery
Long periods of high unemployment are
without a doubt detrimental to unemployed
workers and to the health of the economy.
However, there are other, less-known
Yale economist Lisa Khan found that col-
lege graduates entering the job market during
1 e predicte d unemployment rate is f rom
the Sur vey of Professional Forecasters of the
Federal Reser ve Bank of Philadelphia.
2 e statistics are adapted f rom Autor.
3 Relevant d ata are from Busine ss Employment
Dyna mics of the Bureau of L abor Statistics.
4 A good summary can be found i n Garrett
and Ott.
5 See Edin and Kefa las for details.
6 See Di Leo.
7 e Congres sional Budget Oce estimates
that natural r ate of unemployment in t he
U.S. is 5 percent. It dene s the natural r ate of
unemployment as “the rate of unemployment
arisi ng from all sources except uctuations in
aggregate demand.” See Cong ressional Budget
8 See El-G haza ly.
9 e calcu lation is performed based on t he
assumptions that populat ion grows at a
1 percent an nual rate and lab or force parti-
cipation rate returns to 66 percent (November
2007 level). More information is available
upon request.
Autor, David. “e Polari zation of Job Opportu-
nities i n the U.S. Labor Ma rket.” e Hamilton
Project, A pril 2010.
Bureau of Labor Statistics Busines s Employment
Dyna mics. See ww
Congressional Budget Oce. e Budge t and
Economic Outlook : Fiscal Years 2008 to 2017,
Januar y 2007.
Dave, Dhava l M.; and Kelly, Inas R ashad. “How
Does the Busines s Cycle Aect Eating Habits?”
NBER Working Paper No. 16638, National
Bureau of Economic Research, December 2010.
Di Leo, Luc a. “Bernanke: Job Creation Is Top
Problem.” Real Time Economics, the Wall
Street Journal. Nov. 30, 2010.
Edin, Kathr yn; and Kefal as, Maria. “Promises
I Can Keep: Why Poor Women Put Mot her-
hood before Marriage.” Berkele y: University
of Cali fornia Press. 2005.
El-Gha zaly, Hoda. “e In s and Outs of Unem-
ployment In surance.” Federa l Reserve Ban k
of St. Louis’ Liber8 Economic Information
Newsletter, Novem ber 2010.
Federal Reser ve Bank of Philadelphia. Survey of
Professional Forecasters, First Quarter 2011.
See ww
data/rea l-time-center/survey-of-profes sional-
forecaster s/2011/s ur vq111.cfm
Garrett, oma s A.; and Ott, Lesli S. “City Busi-
ness Cycle s and Crime.” Federa l Reserve Ban k
of St. Louis Working Paper 2008 -026B, revised
July 2009.
Groshen, Er ica L.; and Potter, Simon. “Has
Struc tural Chan ge Contributed to a Jobless
Recover y?” Federal Reserve Bank of New
Yor k Current Issues, August 2 003. Vol. 9,
No. 8, pp. 1-7.
Kahn, Lisa B. “ e Long-Term Labor Ma rket
Consequences of Graduating from Col lege
in a Bad Economy.” e Labour Economics,
April 2010, Vol. 17, No. 2, pp. 303-16.
Mocan, H . Naci; and Bali, Tura n G. “Asymmet-
ric Crime Cycles.” Review of Economics and
Statistics, November 2010, Vol. 92, No. 4,
pp. 8 99-911.
By Natalia Kolesnikova and Yang Liu
18 The Regional Economist | April 2011 The Regional Economist | 19
... Those who were out of the labor market for six months or longer were much less likely to receive calls for job interviews, even when they had extensive relevant experience. 5 4 Kolesnikova and Liu (2011). 5 Ghayad (2013); Kroft, Lange, and Notowidigdo (2013). ...
Technical Report
This report summarizes the long-term findings of a rigorous random assignment evaluation of the WorkAdvance model, a sectoral training and advancement initiative. Launched in 2011, WorkAdvance goes beyond the previous generation of employment programs by introducing demand-driven skills training and a focus on jobs that have identifiable career pathways. The model is heavily influenced by the positive findings from the Sectoral Employment Impact Study completed in 2010, as well as prior research on job retention and career advancement strategies. The WorkAdvance model was implemented between June 2011 and June 2013 by four providers — Per Scholas, St. Nicks Alliance, Madison Strategies Group, and Towards Employment — and a total of 2,564 individuals enrolled in the study. Several previous reports described the implementation, participation, cost, and interim impact findings of WorkAdvance and showed encouraging evidence for the WorkAdvance model. The impact findings presented in those reports covered the first three years of follow-up. While those findings showed earnings gains for some programs in some years, whether WorkAdvance could consistently increase earnings in the long term was still an open question. This report presents the long-term economic impacts of WorkAdvance and covers a two-year period occurring between four and eight years after individuals entered the study. The economic outcomes are based on National Directory of New Hires data and include 2017 and 2018. The report also builds on a previous cost analysis and presents findings from a full benefit-cost analysis to examine whether the effects of WorkAdvance resulted in gains or losses from the perspective of WorkAdvance participants, the government, and society. Key Findings • The WorkAdvance program at Per Scholas increased average earnings in 2017 and 2018; there were no statistically significant effects on average earnings at the other three sites. There is evidence that some of the WorkAdvance programs increased the likelihood of individuals having earnings of at least $30,000 in some time periods. None of the WorkAdvance sites increased employment by a statistically significant amount in either long-term follow-up year. • In the pooled sample from all four providers, WorkAdvance had no effect on employment but increased average earnings and the likelihood of individuals having high earnings. • The overall pattern of economic impact findings suggests that the earnings-based impacts are driven by WorkAdvance group members having higher wages than control group members, rather than by being employed at a higher rate. This suggests WorkAdvance group members are advancing over time, as intended by the WorkAdvance model. • The findings from the benefit-cost analysis are positive from the perspectives of the participants, the government, and society at all four sites. Overall, the WorkAdvance results support the case for focusing on how sector programs can be improved.The long-term economic impacts show that sector programs can increase earnings in the longer term and can lead to advancement gains over time for low-income individuals, but not all sector programs will lead to increases in employment and earnings. Focusing future efforts on how to make the sectoral approach — in particular, the advancement-focused services — more consistently successful can help workforce providers strengthen sector-based programs. This is the final planned report for the WorkAdvance evaluation.
... Moreover, after the 2008 crisis, GDP and employment decoupling have been intensified (Kolesnikova and Liu 2011;Papadimitriou, Hannsgen, and Zezza 2011)-a tendency expected to be reproduced with the COVID crises, especially given the latter's acceleration of the infotech revolution-which is estimated to, if not permanently introduce labor-economizing technologies, at the very least cause an enduring high level of unemployment (Varian 2018;Acemoglu and Retrepo 2018). ...
The 2008 economic crisis expanded the discussion about stabilization policies beyond its usual academic circles. Such concerns seem even more eminent now as, amidst the COVID-19, governments around the world search for solutions to the looming crisis. John Maynard Keynes, Michal Kalecki, and Hyman Minsky have long inspired those who believe that the private sector is unable to maintain long-lasting stability and, even less so, full employment. The remedy relies not in the indirect mechanisms of monetary fine-tuning, but rather on the direct means of fiscal policy. Less acknowledged, however, is that despite of their different approaches, neither of these three authors considered conventional pump-priming fiscal policy a direct policy. Considerations of this nature have, nonetheless, been pursued by a group of post-Keyensian/neo-Kaleckian economists-who argue that discussions about economic stability should be coupled with concerns related to the broader social and environmental systems. To contribute to the newly intensified push of a post-Keynesian/neo-Kaleckian ecological economics, the paper introduces a metric for green jobs, using non-dichotomous measurements as proposed by 'fuzzy logic', as a tool to operationalize an ecological job-guarantee program. ARTICLE HISTORY
... Those who were out of the labor market for six months or longer were much less likely to receive calls for job interviews, even when they had extensive relevant experience. 5 4 Kolesnikova and Liu (2011). 5 Ghayad (2013); Kroft, Lange, and Notowidigdo (2013). ...
Technical Report
Full-text available
L o n g-T e r m E e c t s o f a S e c t o r a l A d v a n c e me n t S t r a t e g y C o s t s , B e n e t s , a n d I mp a c t s f r o m t h e Wo r k A d v a n c e D e mo n s t r a t i o n K e l s e y S c h a b e r g D a v i d H. G r e e n b e r g Ma r c h 2 0 2 0
... Males in this cohort did not experience a substantive positive period effect on employment until year 4, while females did not experience any before being right-censored. This is consistent with the elevated weakness in hiring that characterized the first few years of the economic recovery [88][89]. By contrast, individuals in C3 showed period effects that were larger and grew more rapidly over time, representing the kind of steady year-over-year improvement seen in a strengthening economy. ...
Full-text available
Objective The goal of this study was to analyze differences in the employment and wage trajectories of college-educated young workers in the United States, as distinguished by the timing of their entry into the labor market relative to the onset of the 2008–09 recession. Methods and findings Using annual American Community Survey microdata, we analyzed the first six years of employment and wage outcomes for cohorts of young workers on traditional-student pathways entering the market (1) in 2006, shortly before recession onset; (2) in 2009, during the recession; and (3) in 2012, three years after the recession officially ended. We found evidence for negative effects on outcomes and outcome trajectories differentiated by the recession’s proximity to workers’ labor market entry, including lower wages for the cohort entering in 2009. However, recession effects tended to be smaller for workers at the high end of the education gradient or with no direct exposure to the recession and were outweighed by gendered labor outcome disparities. We also observed a possibly enduring, recession-induced rise in the number of idle young males and the proportion of male and female high school graduates enrolled in college and not working. Conclusions Cohort differences in labor outcomes show that the disadvantages of entering the labor market during an economic downturn appear lasting. However, the subordinate role of timing effects in sorting young workers’ employment and wage rates, when compared to the stark stratification of employment and wage outcomes by education or sex, is a useful reminder that these latter social structures remain key determinants of labor outcomes.
This chapter outlines economic characteristics that shape the Sino-US trading relationship and gives an overview of trade policymaking in both countries. Although this chapter focuses on the United States, much of it is relevant to other Western countries. The purpose of this chapter is twofold—(1) to lay a foundation for the theory in subsequent chapters and (2) to refute common political, often populist, arguments about the harm of trade with China and its causes. Trade is a positive sum game, but it imposes some overlooked costs. These costs are a result of the specifics of the trade policymaking processes in each country which produce a playing field asymmetrically tilted in China’s favor.
We document a secular change in the structure of government consumption spending: Over time the government purchases relatively more private‐sector goods, and relies less on its own production of value added. This process alters the transmission of fiscal policy, by dampening the response of hours, public value added, and the labor share to government spending shocks, while leaving the response of total output unchanged. We rationalize these facts in a general equilibrium model where a decline of the public‐sector relative productivity drives the changing structure of government spending, which in turn modifies the transmission mechanism of government spending shocks.
Objective To examine distributional effects of the 2008 recession and subsequent recovery across generational cohorts. Methods Using data from the Survey of Consumer Finances (2007-2016), we constructed a measure of economic well-being accounting for income, household size and annuitized value of assets. We examine trajectories of adjusted income and inequality, using Gini coefficients and income shares by decile, for the overall population and by cohort during the recession and recovery. Results Inequality declined temporarily during the recession, but reached new highs during the recovery. During recovery, population-level increases in economic resources were not reflected among below-median households, as the more concentrated financial assets rose while broader-based home equity and employment fell or remained stagnant. Inequality measures increased for cohorts in their primary working years (Generation-X and Baby Boomers), but not among the younger Millennials, who were at early stages of education, workforce entry and household formation. Discussion The study illustrates an integrative approach to analyzing cumulative dis/advantage by considering interactions between historically consistent macro-level events, such as economic shocks or policy choices affecting all cohorts, and the persistent life-course processes that tend to increase heterogeneity and inequality as cohorts age over time. Although recovery policies led to rapid recovery of financial asset values, they did not proportionately reach those below the median or their economic resource-types. Results suggest that in a high-inequality environment, recovery policies from economic shocks may need tailoring to all levels of resources in order to achieve more equitable recovery outcomes and prevent exacerbating cohort inequality trajectories.
Objectives Health insurance availability and affordability are vital elements in diagnosis and treatment of patients with cancer and thus constitute clinical significance as well. Although past studies have explored the disparity in mortality figures for patients with different insurance statuses, this population-based study is pioneering in analyzing the changes in cancer mortality risks over time amid macroeconomic shifts. Study design The study uses Surveillance Epidemiology and End Results (SEER) data of 424,889 non-elderly patients with breast, cervical, ovarian, and uterine cancer diagnosed during 2007–2010 and 2011–2015. Methods In addition to discussing incidence figures and insurance patterns, the study uses Kaplan-Meier and Cox's proportional hazard models to examine the changes in survival probability and mortality risks for insurance-stratified patients with female-specific cancer across the two time periods. Results Patients without insurance have an increased risk of mortality over time relative to insured patients. Moreover, uninsured patients face this heightened risk more than Medicaid patients. Discussion Despite public policy measures as well as advancements in diagnostic facilities and treatment technology, the increased relative mortality of patients without insurance limits the long-term affordability of cancer treatment for economically vulnerable patients in comparison with insured patients.
Objective: Cancer patients exhibit disparity in mortality risks across demographic divisions as well as insurance groups. The effects of macroeconomic environment also vary for such strata. This study analyses the gaps between mortality risks for male and female cancer patients with and without insurance and examines how such gaps transform over time with macroeconomic shifts. Methods: Demographic, clinical and treatment records of 45,750 melanoma and 91,157 lung cancer patients diagnosed in 2007-2009 and 2011-2013 were extracted from Surveillance, Epidemiology and End Results (SEER) database. Kaplan-Meier test was applied to ascertain survival probability of each insurance group, while Cox proportional hazard model was used to assess relative mortality risk for Medicaid and uninsured patients, for the whole data as well as separately for both time periods and genders. Results: Both the hazard ratios and change thereof over time are greater for female patients without insurance, than for male patients. More than any insurance-gender subgroup, uninsured female patients of melanoma have much increased hazard ratios, from 1.41 [95% confidence interval (CI), 1.04-1.92] to 2.22 [95% CI, 1.67-2.94]. Conclusion: Despite diagnostic improvements and technology advancements, the adverse effects of macroeconomic crisis are associated with increased relative mortality risks for cancer patients without insurance, more for women than men.
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An in-depth analysis of the state of the U.S. labor market over the past three decades reveals that the U.S. labor market is polarizing into low- and high-skill jobs, with fewer opportunities in the middle.
Millie Acevedo bore her first child before the age of 16 and dropped out of high school to care for her newborn. Now 27, she is the unmarried mother of three and is raising her kids in one of Philadelphia's poorest neighborhoods. Would she and her children be better off if she had waited to have them and had married their father first? Why do so many poor American youth like Millie continue to have children before they can afford to take care of them? Over a span of five years, sociologists Kathryn Edin and Maria Kefalas talked in-depth with 162 low-income single moms like Millie to learn how they think about marriage and family. Promises I Can Keep offers an intimate look at what marriage and motherhood mean to these women and provides the most extensive on-the-ground study to date of why they put children before marriage despite the daunting challenges they know lie ahead.
This paper studies the labor market experiences of white-male college graduates as a function of economic conditions at time of college graduation. I use the National Longitudinal Survey of Youth whose respondents graduated from college between 1979 and 1989. I estimate the effects of both national and state economic conditions at time of college graduation on labor market outcomes for the first two decades of a career. Because timing and location of college graduation could potentially be affected by economic conditions, I also instrument for the college unemployment rate using year of birth (state of residence at an early age for the state analysis). I find large, negative wage effects of graduating in a worse economy which persist for the entire period studied. I also find that cohorts who graduate in worse national economies are in lower-level occupations, have slightly higher tenure and higher educational attainment, while labor supply is unaffected. Taken as a whole, the results suggest that the labor market consequences of graduating from college in a bad economy are large, negative and persistent.
As economic expansions raise employment and wages, associated shifts in income and time constraints would be expected to also impact individuals' health. This study utilizes information from the US Behavioral Risk Factor Surveillance System (1990-2009) to explore the relationship between the state unemployment rate and the consumption of various healthy and unhealthy foods in the United States. Estimates, based on fixed effects methodologies, indicate that unemployment is associated with reduced consumption of fruits and vegetables and increased consumption of "unhealthy" foods such as snacks and fast food. Heterogeneous responses are also identified through detailed sample stratifications and by isolating the effect for those predicted to be at highest risk of unemployment based on their socioeconomic characteristics. Among individuals predicted to be at highest risk of being unemployed, a one percentage point increase in the resident state's unemployment rate is associated with a 3-6% reduction in the consumption of fruits and vegetables. The impact is somewhat higher among younger, low-educated, and married adults. Supplementary analyses also explore specific mediating pathways, and point to reduced family income and adverse mental health as significant channels underlying the procyclical nature of healthy food consumption.
Recent theoretical models based on dynamic human capital formation, or social influence, suggest an inverse relationship between criminal activity and economic opportunity and between criminal activity and deterrence, but predict an asymmetric response of crime. In this paper we use three different data sets and three different empirical methodologies to document this previously-unnoticed regularity. Using nonparametric methods we show that the behavior of property crime is asymmetric over time, where increases are sharper but decreases are gradual. Using aggregate time-series U.S. data as well as data from New York City we demonstrate that property crime reacts more (less) strongly to increases (decreases) in the unemployment rate, to decreases (increases) in per capita real GDP and to decreases (increases) in the police force. The same result is obtained between unemployment and property crime in annual state-level panel data. These results suggest that it may be cost effective to implement mechanisms to prevent crime commission rates from rising in the first place.
The current recovery has seen steady growth in output but no corresponding rise in employment. A look at layoff trends and industry job gains and losses in 2001-03 suggests that structural change - the permanent relocation of workers from some industries to others - may help explain the stalled growth in jobs.
We explore the influence of city-level business cycle fluctuations on crime in 20 large cities in the United States. Our monthly time series analysis considers seven crimes over an approximately 20-year period: murder, rape, assault, robbery, burglary, larceny, and motor vehicle theft. Short-run changes in economic conditions, as measured by changes in unemployment and wages, are found to have little effect on city crime across many cities, but property crimes were more likely to be influenced by changes in economic conditions than were more violent crimes. Contrary to the deterrence hypothesis, we find strong evidence that in many cities more arrests follow from an increase in crime rather than arrests leading to a decrease in crime. This is true especially for the more visible crimes of robbery and vehicle theft and suggests that city officials desire to remove these crimes from the public's view.
The Polarization of Job Opportunities in the U.S. Labor Market
  • David Autor
Autor, David. " The Polarization of Job Opportunities in the U.S. Labor Market. " The Hamilton Project, April 2010.
Has Structural Change Contributed to a Jobless Recovery Federal Reserve Bank of New York Current Issues
  • Erica L Groshen
  • Simon Potter
Groshen, Erica L.; and Potter, Simon. " Has Structural Change Contributed to a Jobless Recovery? " Federal Reserve Bank of New York Current Issues, August 2003. Vol. 9, No. 8, pp. 1-7.
The Ins and Outs of Unemployment Insurance Federal Reserve Bank of St. Louis' Liber8 Economic Information Newsletter
  • Hoda El-Ghazaly
El-Ghazaly, Hoda. " The Ins and Outs of Unemployment Insurance. " Federal Reserve Bank of St. Louis' Liber8 Economic Information Newsletter, November 2010.