Search Results
Journal Article
On the causes of declines in the labor force participation rate
The unemployment rate stood at 5.0 percent when the Great Recession started in December 2007 but had more than doubled toward the end of 2009, peaking at 10 percent. Since then, however, it has steadily declined. As of the end of 2013, the jobless rate stood at 6.7 percent. While it is still high by historical standards, significant progress has been made. Moreover, the declines were often faster than many had predicted.
Working Paper
Search Frictions, Labor Supply, and the Asymmetric Business Cycle
We develop a business cycle model with search frictions in the labor market and a labor supply decision along the extensive margin that yields cyclical asymmetry between peaks and troughs of the unemployment rate and symmetric fluctuations of the labor force participation rate as in the U.S. data. We calibrate the model and find that cyclical changes in the extent of search frictions are solely responsible for the peak-trough asymmetry. Participation decisions do not generate asymmetry but contribute to the fluctuations in search frictions by changing the size and composition of the pool of ...
Journal Article
The Changing Cyclicality of Labor Force Participation
The labor force participation rate has become more sensitive to the business cycle.
Working Paper
Trends in Labor Force Participation and Unemployment, 1976-2024
Using CPS microdata, 1976-2024, we estimate trend and cyclical components of unemployment and labor force participation for 44 age-gender-education groups. We fit a parsimonious state-space model in which each series is the sum of latent cohort and time-varying age effects and a latent cyclical factor shared across unemployment and participation, without imposing structural covariates. Aggregating group trends with observed population shares, we find that population aging and educational upgrading explain most long-run movements in aggregate trends, while cohort effects drive large gender ...