Working Paper

Labor Force Exiters around Recessions: Who Are They?


Abstract: This paper identifies workers who experience a job separation during a recession and tracks their labor force status in the following year using the Current Population Survey. Workers are classified as exiters if they leave the labor force shortly after their job loss and non-exiters if they do not. The pool of exiters is disproportionately female, less-educated, and older. During the pandemic recession, there were even more older workers in the exiters pool, although they were less likely to report being retired compared to in the Great Recession. In addition, statuses were more persistent during the Great Recession: for both exiters and non-exiters the majority were in the same labor force status a year later. I then use the patterns of these samples of job-separators to estimate the propensity of being re-employed in a year and apply the estimates to the general out-of-work pools during the two recessions. I find that changes in the likelihood of being re-employed as well as the composition of individuals out of work are important for understanding the differences between the labor market in the two recessions.

Keywords: job separations; recessions; labor force; unemployment;

JEL Classification: E24; J21;

https://doi.org/10.20955/wp.2022.027

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2022-08-31

Number: 2022-027