Assessing the Factors Underlying Long-Term Unemployment

Assessing the Factors Underlying Long-Term Unemployment

August 20, 2013

Abstract

The staggeringly large number of people who have been looking for work for more than six months is a defining feature of the Great Recession and its aftermath. Cyclical factorsthe profound economic contraction coupled with the weak recoverylikely account for the majority of this problem. That conclusion largely stems from research that finds that potential structural explanations such as mismatches between workers skills and employers' needs, the erosion of workers skills as they remain jobless, and the work disincentive effects of the unemployment insurance program all fail to account for much of the elevated levels of long-term unemployment.

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