What is Behind the Rise in Long-Term Unemployment?

24 Pages Posted: 10 Aug 2010

See all articles by Daniel Aaronson

Daniel Aaronson

Federal Reserve Bank of Chicago

Bhashkar Mazumder

Federal Reserve Bank of Chicago

Shani Schechter

Federal Reserve Bank of Chicago

Date Written: May 1, 2010

Abstract

This article analyzes what is behind the recent unprecedented rise in long-term unemployment and explains what this rise might imply for the economy going forward. In particular, the authors attribute the sharp increase in unemployment duration in 2009 to especially weak labor demand and, to a lesser degree, extensions in unemployment insurance benefits.

Keywords: long-term unemployment, unemployment, unemployment duration, unemployment insurance, Mobility, Unemployment, and Vacancies, Unemployment: Models, Duration, Incidence, and Job Search, Unemployment Insurance, Severance Pay, Plant Closings

JEL Classification: J60, J64, J65

Suggested Citation

Aaronson, Daniel and Mazumder, Bhashkar and Schechter, Shani, What is Behind the Rise in Long-Term Unemployment? (May 1, 2010). Economic Perspectives, Vol.34, No. 2, 2010, Available at SSRN: https://ssrn.com/abstract=1655960

Daniel Aaronson (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604-1413
United States

Bhashkar Mazumder

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

Shani Schechter

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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