Long-term unemployment and the great recession: The role of composition, duration dependence, and nonparticipation

Kory Kroft, Fabian Lange, Matthew J. Notowidigdo*, Lawrence F. Katz

*Corresponding author for this work

Research output: Contribution to journalArticle

33 Scopus citations

Abstract

We explore the role of composition, duration dependence, and labor force nonparticipation in accounting for the sharp increase in the incidence of long-term unemployment (LTU) during the Great Recession. We show that compositional shifts account for very little of the observed increase in LTU. Using panel data from the Current Population Survey for 2002-7, we calibrate a matching model that allows for duration dependence in unemployment and transitions between employment, unemployment, and nonparticipation. The calibrated model accounts for almost all of the increase in LTU and much of the observed outward shift in the Beveridge curve between 2008 and 2013.

Original languageEnglish (US)
Pages (from-to)S7-S54
JournalJournal of Labor Economics
Volume34
Issue numberS1
DOIs
StatePublished - Jan 2016

ASJC Scopus subject areas

  • Industrial relations
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Long-term unemployment and the great recession: The role of composition, duration dependence, and nonparticipation'. Together they form a unique fingerprint.

  • Cite this