On December 12, 2019, Fed in Print will introduce its new platform for discovering content. Please direct your questions to Anna Oates

Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of Kansas City
Economic Review
The shadow labor supply and its implications for the unemployment rate
Troy A. Davig
Jose Mustre-del-Rio

In the wake of the Great Recession there has been a sharp rise in the number of people who indicate they want a job, but are not actively seeking one. This group, on the periphery of the labor market, may be viewed as a "shadow labor supply." Since they are not actively seeking work, they are not counted by the government as unemployed and not considered part of the labor force. But if many start seeking jobs as the economy recovers, the unemployment rate could rise or at least slow its descent. Davig and Mustre-del-Río analyze possible flow rates from this group and other non-employed groups into employment or into official unemployment. They find the shadow labor supply will likely affect the unemployment rate only modestly, but potential variation in labor market participation among the entire non-employed population may have greater impact.

Download Full text
Cite this item
Troy A. Davig & Jose Mustre-del-Rio, "The shadow labor supply and its implications for the unemployment rate" , Federal Reserve Bank of Kansas City, Economic Review, issue Q III, pages 5-29, 2013.
More from this series
JEL Classification:
Subject headings:
Keywords: Shadow labor supply; Labor supply; Unemployment
For corrections, contact LDayrit ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal