@techreport{NBERw17313,
 title = "Labor Market Dysfunction During the Great Recession",
 author = "Kyle F. Herkenhoff and Lee E. Ohanian",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "17313",
 year = "2011",
 month = "August",
 URL = "http://www.nber.org/papers/w17313",
 abstract = {This paper documents the abnormally slow recovery in the labor market during the Great Recession, and analyzes how mortgage modification policies contributed to delayed recovery. By making modifications means-tested by reducing mortgage payments based on a borrower's current income, these programs change the incentive for households to relocate from a relatively poor labor market to a better labor market. We find that modifications raise the unemployment rate by about 0.5 percentage points, and reduce output by about 1 percent, reflecting both lower employment and lower productivity, which is the result of individuals losing skills as unemployment duration is longer.},
}