Unemployment Flows in the U.S. Labor Market

Perry, George L.
June 1972
Brookings Papers on Economic Activity;1972, Issue 2, p245
Academic Journal
The article examines the job market experience of various labor force groups by analyzing the flows of workers into and out of unemployment. Unemployment is always near the forefront of economic policy issues, but what is perceived as the chief unemployment problem keeps changing. For most of the decade after 1956, excessive cyclical unemployment was the chief policy problem. Us solution lay in restoring full employment by expanding aggregate demand. As this purpose was achieved, inflation emerged and unemployment as a policy problem took on two new dimensions. One was how to reconcile full employment with reasonable price stability. The other was how to reduce the excessive unemployment that some groups of workers still suffered and that became increasingly apparent as unemployment elsewhere became negligible. Now, in the early 1970s, cyclical unemployment has reemerged before any permanent solutions to the other problems have been found. Disaggregating information about the labor market has helped in identifying significant changes in the composition of unemployment and in the unemployment experience of various parts of the work force. And some new insights on the kinds of labor market experience that lie behind the unemployment statistics have come from recent theoretical models, particularly those that view unemployment in the context of job search by workers flowing through the labor market.


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