Economic Brief

June 2012, No. 12-06

The Increased Role of Flows Between Nonparticipation and Unemployment During the Great Recession and Recovery

Marianna Kudlyak and David A. Price

Labor market research often focuses on transition rates between employment and unemployment without analyzing the effects of transition rates into and out of the labor force. Current Population Survey data permit analysis of transition rates among all three labor force statuses. A study at the Richmond Fed examines the role of labor force participation in the dynamics of the aggregate unemployment rate across the four most recent recessions. This research finds an increased role for transition rates between nonparticipation and unemployment during the Great Recession and recovery.

Additional Resources

Kudlyak, Marianna, and Felipe Schwartzman, "Accounting for Unemployment in the Great Recession: Nonparticipation Matters," Federal Reserve Bank of Richmond Working Paper No. 12-04, June 2012.

Sahin, Ayseg├╝l, Joseph Song, and Bart Hobijn, "The Unemployment Gender Gap during the 2007 Recession," Federal Reserve Bank of New York Current Issues in Economics and Finance, February 2010, vol. 16, no. 2.

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