Insights Blog

The Duration of U.S. Joblessness and the Great Recession

September 22, 2021
Working Paper—Time spent unemployed can have a profound impact on the quality of a worker's life, future, and family. SCEPA's latest working paper focuses on gender and racial disparities in the time it takes to find work and how these periods are impacted by unemployment insurance.

"The Duration of U.S. Joblessness and the Great Recession" a working paper by SCEPA Research Assistant Aida Farmand, Assistant Professor of Economics at Franklin and Marshall College Feridoon Koohi-Kamali, and New School for Social Research Economics PhD Student Jose Pedro Bastos Neves, investigates how the time a worker spends unemployed differs by race and gender. Additionally, the team investigates how the presence of unemployment insurance impacts joblessness lengths.

Understanding how much time individuals spend in unemployment, how this duration changes over the business cycle, and how the length of unemployment varies by demographic characteristics are important aspects of job loss because they have a direct impact on workers’ welfare. Moreover, changes in duration of unemployment spells can impact aggregate unemployment rates.

This paper develops models of duration of unemployment for the United States and applies them to the U.S. 1996-2020 biennial Displaced Worker Survey (DWS). The team focuses on gender and race of workers as the principal determinant of difference in return to employment and how that is impacted by unemployment insurance. The estimates show that men’s hazard rate of (re)employment to full-time jobs is 7% to 15% lower compared to women.

Unemployment Insurance (UI) has a diminished impact on prolonging Black workers’ and women’s unemployment spells, with Black and female UI recipients having a 10% higher hazard rate of transition to full-time employment. Moreover, results from the team's competing risk model that accounts for multiple exit destinations following job loss indicate that Black workers experience longer unemployment spells. They have 28% and 27% lower rates of exit to full-time and part-time employment respectively following job displacement.

Read the full working paper here.