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40 posts on "Labor Economics"

November 19, 2014

The Long-Term Unemployed and the Wages of New Hires



Third in a three-part series
This is the third in a series of blog posts on the topic of measuring labor market slack. In this post, we assess the relationships between short- and long-term unemployment and wages by comparing the differences in states’ experiences over the business cycle. While all states felt the impact of the Great Recession, some fared better than others. Consequently, it is possible to use differences in the composition and shifts of short- and long-term unemployment to determine whether short-term unemployment exerts a greater influence on wage determination. The results suggest that there is little difference in how long-term and short-term unemployment affect wages, and as a consequence, the long-term unemployed shouldn’t be dismissed when evaluating labor market slack.

Continue reading "The Long-Term Unemployed and the Wages of New Hires" »

Posted by Blog Author at 7:00 AM in Labor Economics, Macroecon | Permalink | Comments (3)

November 18, 2014

How Attached to the Labor Market Are the Long-Term Unemployed?



Second in a three-part series
In this second post in our series on measuring labor market slack, we analyze the labor market outcomes of long-term unemployed workers to assess their employability and labor force attachment. If long-term unemployed workers are essentially nonparticipants, their job-finding prospects and attachment to the labor force should resemble those of nonparticipants who are not looking for a job and should differ considerably from those of short-term unemployed workers. Using data that allow us to follow workers over longer time periods, we find that differences in labor market outcomes between short- and long-term unemployed workers exist, but these differences narrow at longer horizons. In contrast, labor market outcomes for the long-term unemployed are substantially different from those of nonparticipants who do not want a job.

Continue reading "How Attached to the Labor Market Are the Long-Term Unemployed?" »

Posted by Blog Author at 7:00 AM in Labor Economics, Macroecon | Permalink | Comments (1)

November 17, 2014

Measuring Labor Market Slack: Are the Long-Term Unemployed Different?



Istock-longterm-unemployed-450_caption
First in a three-part series
There has been some debate in the Liberty Street Economics blog and in other outlets, such as Krueger, Cramer, and Cho (2014) and Gordon (2013), about whether the short-term unemployment rate is a better measure of slack than the overall unemployment rate. As the chart below shows, the two measures are sending different signals, with the short-term unemployment rate back to its pre-recession level while the overall rate is still elevated because of a high long-term unemployment rate. One can argue that the unemployment rate is exaggerating the extent of underutilization in the labor market, based on the premise that the long-term unemployed are, in practice, out of the labor force and likely to exert little pressure on earnings. If this is indeed the case, inflationary pressures might start building up sooner than suggested by the overall unemployment rate. In a three-part series, we study the available evidence on the long-term unemployed and argue against this premise. The long-term unemployed should not be excluded from measures of labor market slack.

Continue reading "Measuring Labor Market Slack: Are the Long-Term Unemployed Different?" »

Posted by Blog Author at 7:00 AM in Labor Economics, Macroecon | Permalink | Comments (3)

October 08, 2014

Demographic Trends and Growth in Japan and the United States



IStock_000042647488Small_300 Japan’s population is shrinking and getting older, with the population falling at a 0.2 percent rate this year and the working-age population (ages 16 to 64) falling at a much faster rate of almost 1.5 percent. In contrast, the U.S. population is rising at a 0.7 percent annual rate and the working-age population is rising at a 0.2 percent rate. So far, supporting the growing share of Japan’s population that is 65 and over has been the substantial increase in the share of working-age women entering the labor force. In contrast, U.S. labor force participation rates have been falling for both men and women. Japan’s labor market adjustments help explain the steady, albeit, modest growth in output per person despite the surge in the 65 and over cohort. Indeed, Japan has been able to match U.S. per capita growth since 2000.

Continue reading "Demographic Trends and Growth in Japan and the United States" »

Posted by Blog Author at 7:00 AM in International Economics, Labor Economics, Macroecon | Permalink | Comments (1)

September 30, 2014

Do Unemployment Benefits Expirations Help Explain the Surge in Job Openings?



Job openings are arguably one of the most important indicators of recovery in the labor market, as they reflect employers’ willingness to hire. The number of job openings has recovered steadily since the recession, yet through the end of 2013, the openings rate was still substantially below its pre-recession peak (see chart below). Starting in January 2014, however, the number of job openings increased dramatically, up by 20 percent through June 2014, and job openings relative to employment jumped back to the peak of the previous expansion. In this post, we argue that the expiration of the Emergency Unemployment Compensation (EUC) program may have contributed to this rapid rise in 2014.

Continue reading "Do Unemployment Benefits Expirations Help Explain the Surge in Job Openings? " »

Posted by Blog Author at 7:00 AM in Labor Economics, Macroecon | Permalink | Comments (5)

September 04, 2014

Are the Job Prospects of Recent College Graduates Improving?

Jaison R. Abel and Richard Deitz

This post is the fourth in a series of four Liberty Street Economics posts examining the value
of a college degree
.


The promise of finding a good job upon graduation has always been an important consideration when weighing the value of a college degree. In our final post of this week’s blog series, we take a look at the job prospects of recent college graduates. While unemployment among recent graduates has continued to fall since 2011, underemployment has continued to climb—meaning that fewer graduates are finding jobs that make use of their degrees. Do these trends mean that there has been a decline in the demand for those with college degrees? Using data on online job postings, we show that after falling sharply during the Great Recession, the demand for college graduates rebounded during the early stages of the recovery, but has been flat for the past year and a half, suggesting that the demand for college graduates has leveled off. All in all, while finding a job has become easier for recent college graduates over the past few years, finding a good job has not, and doing so is likely to remain a challenge for some time to come.

Continue reading "Are the Job Prospects of Recent College Graduates Improving?" »

Posted by Blog Author at 7:05 AM in Labor Economics | Permalink | Comments (0)

College May Not Pay Off for Everyone

Jaison R. Abel and Richard Deitz

This post is the third in a series of four Liberty Street Economics posts examining the value
of a college degree
.


In our recent Current Issues article and blog post on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs. However, this does not mean that college is a good investment for everyone. Our work, like the work of many others who come to a similar conclusion, is based in large part on the empirical observation that the average wages of college graduates are significantly higher than the average wages of those with only a high school diploma. However, not all college students come from Lake Wobegon, where “all of the children are above average.” In this post, we show that a good number of college graduates earn wages that are not materially different from those of the typical worker with just a high school diploma. This suggests that, at least from an economic perspective, college may not pay off for a significant number of people.

Continue reading "College May Not Pay Off for Everyone" »

Posted by Blog Author at 7:00 AM in Labor Economics | Permalink | Comments (4)

September 03, 2014

Staying in College Longer Than Four Years Costs More Than You Might Think

Jaison R. Abel and Richard Deitz

This post is the second in a series of four Liberty Street Economics posts examining the value
of a college degree
.


In yesterday’s blog post and in our recent article in the New York Fed’s Current Issues series, we showed that the economic benefits of a bachelor’s degree still outweigh the costs, on average, even in today’s difficult labor market. Like others who assess the value of a bachelor’s degree, we base our estimates on the assumption that a student takes four years to finish the degree. But it is not uncommon for people to take longer than that. In fact, recent data indicate that among those who complete a bachelor’s degree within six years, only about two-thirds finish in four years or less. What does it cost to stay in college for a fifth or sixth year before finishing that degree? Perhaps more than you might think.

Continue reading "Staying in College Longer Than Four Years Costs More Than You Might Think" »

Posted by Blog Author at 12:00 PM in Labor Economics | Permalink | Comments (2)

Just Released: N.Y. Fed’s Emanuel Moench to Become Head of Research at the Deutsche Bundesbank



No one can accuse the Federal Reserve Bank of New York of not being a big supporter of central bank cooperation. Furthering that theme, I’m pleased to report that Emanuel Moench will join the staff of the Bundesbank after having launched his career here at the New York Fed. In February 2015, Emanuel will take on a new role as Head of Research at the Deutsche Bundesbank.

Continue reading "Just Released: N.Y. Fed’s Emanuel Moench to Become Head of Research at the Deutsche Bundesbank" »

Posted by Blog Author at 9:00 AM in Labor Economics | Permalink | Comments (0)

September 02, 2014

From Our Archive: Reading Labor Market Slack

Anna Snider

In her speech “Labor Market Dynamics and Monetary Policy” at the Kansas City Fed’s recent Jackson Hole symposium, Fed chairwoman Janet Yellen discussed economic puzzles challenging policymakers, including topics we’ve addressed on Liberty Street Economics. A central and much-debated question is: how tight is the current labor market? The unemployment rate is one key measure. But in February, a team of our bloggers proposed a finer tool to measure slack—one that distinguishes the effects of long- and short-duration unemployment on wage inflation.

Continue reading "From Our Archive: Reading Labor Market Slack" »

Posted by Blog Author at 2:00 PM in Labor Economics | Permalink | Comments (0)
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