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Three-And-A-Half Million U.S. Employees Have Been Mislaid: Or, An Explanation of Unemployment, 1934-1941

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  • Michael R. Darby

Abstract

A major conceptual error in the standard BLS and Lebergott unemployment estimates for 1933-1943 is reported. Emergency workers (employees of federal contracyclical programs such as WPA) were counted as unemployed on a normal-jobs-to-be-created instead of job-seekers unemployment definition. For 1934-1941, the corrected unemployment levels are reduced by two to three-and-a half million people and the rates by 4 to 7 percentage points. The corrected data show strong movement toward the natural unemployment rate after 1933 and are very well explained by an anticipations-search model using annual full-time earnings.

Suggested Citation

  • Michael R. Darby, 1975. "Three-And-A-Half Million U.S. Employees Have Been Mislaid: Or, An Explanation of Unemployment, 1934-1941," NBER Working Papers 0088, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0088
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    1. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 87-104, August.
    2. Gordon, Robert J, 1969. "$45 Billion of U.S. Private Investment Has Been Mislaid," American Economic Review, American Economic Association, vol. 59(3), pages 221-238, June.
    3. Gerhard Bry, 1959. "The Average Workweek as an Economic Indicator," NBER Books, National Bureau of Economic Research, Inc, number bry_59-1.
    4. Lucas, Robert E, Jr & Rapping, Leonard A, 1969. "Real Wages, Employment, and Inflation," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 721-754, Sept./Oct.
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