Analysis of structural problems in the U.S. economy : why long term unemployment remains significantly elevated?

Καμπούρογλου, Νικόλαος

Master Thesis

Author

Καμπούρογλου, Νικόλαος

Date

2015-07

Abstract

After the last recession the number of long term unemployed in the U.S. increased to more than double its previous all time high and remained extraordinarily elevated even as the economy recovered. This led economists to question if that rise is a normal consequence of the recession or if the economy changed structurally in a way that even if it expanded and created new jobs a large number of specific workers would remain unemployed. This paper uses an equilibrium search and matching framework and empirical data from the labor market to examine if the structural unemployment rose after the recession and if it did which factors contributed to that rise. Then the paper examines if the rise in structural unemployment is enough to explain the rise in long term unemployment, and if not, identifies the factors responsible. The analysis suggests that structural unemployment rose 0.5 percent since 2007 mainly caused by a labor market skill mismatch. The structural unemployment itself is not enough to explain the rise in long term unemployment which the paper finds was caused by a secular rise in place for decades and by the normal effects of the recession. Although the labor market is structurally worse than it was before the recession and it is expected to remain so in the near future, it did not deteriorate as much as some economists suggested tempted by the rise in long term unemployment.

Postgraduate Studies Programme

Χρηματοοικονομική και Τραπεζική με κατεύθυνση στην Χρηματοοικονομική και Τραπεζική Διοικητική

Department

Σχολή Χρηματοοικονομικής και Στατιστικής. Τμήμα Χρηματοοικονομικής και Τραπεζικής Διοικητικής

Number of pages

Language

English

URI

https://dione.lib.unipi.gr/xmlui/handle/unipi/8859

Collections

Τμήμα Χρηματοοικονομικής και Τραπεζικής Διοικητικής

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