SECTORAL CHANGE AND UNEMPLOYMENT DURING THE GREAT RECESSION, IN HISTORICAL PERSPECTIVE

Authors


  • I have benefitted from the comments of Skip Sauer. I thank the co-editor and two anonymous referees for their careful reading, comments and criticisms. I am particularly indebted to Co-Editor Marlon Boarnet and Assistant Editor Casey Wagner for their help above and beyond the call of duty in preparing the final version of this manuscript. All errors and omissions are my sole responsibility. [Correction added on May 23, 2014, after first online publication: Acknowledgement footnote updated.]

ABSTRACT

I examine the effect of sectoral change on U.S. state unemployment during the Great Recession. Of the 4.1 percentage point increase in mean state unemployment between 2007 and 2009, increased structural change explains 0.6–1.18 percentage points, and increased estimated effects of structural change 0.8–2.7 percentage points. Despite the role of housing in the recession, neither construction nor any other one sector can account for the results. Although the pace and role of structural change had returned to normal levels after the Great Recession, their effects persisted, raising mean state unemployment by 0.9–2.3 percentage points in 2011.

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