Can sectoral reallocation explain the jobless recovery?

Aaronson, Daniel; Rissman, Ellen R.; Sullivan, Daniel G.

Journal Article

Can sectoral reallocation explain the jobless recovery?

Abstract: This article reconsiders the case for sectoral labor reallocation's role in the jobless recovery. The authors review and critique previous attempts to measure sectoral reallocation, with a particular emphasis on the recent contribution of Groshen and Potter (2003). Their conclusion, based on an extension of Rissman (1997), is that the need of reallocate employment across industries was lower during the most recent two recessions than in previous business cycles. Therefore, sectoral reallocation likely has not played an important role in the jobless recoveries.

Keywords: Labor mobility; Employment (Economic theory);