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Factors of Immobility: Why the Unemployment Rate is Slow to Adjust

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  • Louis Pantuosco
  • Laura Ullrich

Abstract

During the recent recession and the continuing recovery, the national unemployment rate has maintained a level that has only been observed one other time since the Great Depression. While the initial causes of the increased unemployment rate are documented, the adjustment process and reduction of unemployment rates back toward some natural rate has not been addressed empirically. In this paper, the authors analyze labor supply side factors that may cause unemployment rates to remain high for a longer period than the typical recession. The authors focus on the impact of unemployment insurance extensions, housing market contractions and the general breadth of the economic downturn as factors that slow the labor supply adjustment process and lead to prolonged high rates of unemployment. Copyright International Atlantic Economic Society 2014

Suggested Citation

  • Louis Pantuosco & Laura Ullrich, 2014. "Factors of Immobility: Why the Unemployment Rate is Slow to Adjust," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 20(3), pages 325-337, August.
    • Handle: RePEc:kap:iaecre:v:20:y:2014:i:3:p:325-337:10.1007/s11294-014-9476-x
    DOI: 10.1007/s11294-014-9476-x
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    More about this item

    Keywords

    Labor; Recession; Housing; J21;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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