Potential causes and implications of the rise in long-term unemployment

RePEc Short ID: plu38
ORCID iD: 0000-0001-6505-7807

Hornstein, Andreas; Lubik, Thomas A.; Romero, Jessica Sackett

Briefing

Potential causes and implications of the rise in long-term unemployment

Abstract: Long-term unemployment rose dramatically during the recent recession and remains elevated. A primary cause may be the fact that more workers with inherently low job finding rates have become unemployed. This would suggest that the natural rate of unemployment has increased, and that additional monetary stimulus may have only a limited effect on reducing unemployment.

Keywords: Labor market; Unemployment; Recessions; Monetary policy;