Labor Force Exiters around Recessions: Who Are They?

This article identifies workers who experienced a job separation during the Great Recession or the pandemic recession and tracks their labor force status in the following year, using the Current Population Survey. Workers are classified as exiters if they leave the labor force shortly after their job loss and non-exiters if they do not. The pool of exiters is disproportionately female, less educated, and older. During the pandemic recession, there were even more older workers in the exiters pool, although they were less likely to report being retired compared with in the Great Recession. In addition, statuses were more persistent during the Great Recession: For both exiters and non-exiters, the majority had the same labor force status a year later. I then use the patterns of these samples of job separators to estimate the propensity of being reemployed in a year and apply the estimates to the general out-of-work pools during the two recessions. I find that changes in the likelihood of being reemployed as well as the composition of individuals out of work are important for understanding the differences between the labor market in the two recessions.