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|Abstract:||Long-term transition rates calculated from the Current Population Survey, the Survey of Income and Program Participation, and Rutgers University’s Work Trends Survey indicate that the long-term unemployed have a 20 to 40 percent lower probability of being employed 1 to 2 years in the future than do the short-term unemployed. In comparison with the short-term unemployed, for the long-term unemployed the job finding rate is less sensitive to the state of the business cycle, but their labor force withdrawal rate is more procyclical. A calibration exercise finds that the tendency of the labor force withdrawal rate of the long-term unemployed to decline in a recession and then rise in a recovery plays an important role in the well-documented loop around the Beveridge curve. Overall, the results suggest that the longer workers are unemployed, the less attached they become to the labor market.|
|Citation:||Krueger, Alan B, Cramer, Judd, Cho, David. (2014). Are the Long-Term Unemployed on the Margins of the Labor Market?. Brookings Papers on Economic Activity, 2014 (1), 229 - 299. doi:10.1353/eca.2014.0004|
|Pages:||229 - 299|
|Type of Material:||Journal Article|
|Journal/Proceeding Title:||Brookings Papers on Economic Activity|
|Version:||Final published version. Article is made available in OAR by the publisher's permission or policy.|
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