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Thursday, November 19, 2015

'How Workers Exit the Labor Market after Local Economic Downturns'

The main point of this research is how recessions impact labor market participation, but it also supports the claim in my most recent column that worker mobility (in terms of moving up the job ladder) has fallen due to "declining economic prospects":

How workers exit the labor market after local economic downturns: In light of the recent Great Recession, we continue to learn about how large economic downturns directly affect workers in a variety of ways. Here, we document that following an adverse demand shock, individuals exit local labor markets primarily through migration, although that has become less prominent in the Great Recession. Faced with declining economic prospects, workers are becoming more likely to stay put, without re-entering the labor market. While our research documents the increase in non-participation following adverse labor demand shocks, more needs to be done to understand what effect this phenomenon has on the broader economy. In particular, little research has been done on the effect of non-participation on wages and employment prospects for those seeking work, or on the long-term effects labor force exit has on a worker’s human capital.

    Posted by on Thursday, November 19, 2015 at 09:00 AM in Economics, Unemployment | Permalink  Comments (32)


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