NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Hie Joo Ahn

Board of Governors
of the Federal Reserve System
20th & C Street, NW.
Washington, D.C. 20551

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Institutional Affiliation: Federal Reserve Board

NBER Working Papers and Publications

June 2020Measuring Labor-Force Participation and the Incidence and Duration of Unemployment
with James D. Hamilton: w27394
The underlying data from which the U.S. unemployment rate, labor-force participation rate, and duration of unemployment are calculated contain numerous internal contradictions. This paper catalogs these inconsistencies and proposes a unified reconciliation. We find that the usual statistics understate the unemployment rate and the labor-force participation rate by about two percentage points on average and that the bias in the latter has increased over time. The BLS estimate of the average duration of unemployment substantially overstates the true duration of uninterrupted spells of unemployment and misrepresents what happened to average durations during the Great Recession and its recovery.
July 2016Heterogeneity and Unemployment Dynamics
with James D. Hamilton: w22451
This paper develops new estimates of flows into and out of unemployment that allow for unobserved heterogeneity across workers as well as direct effects of unemployment duration on unemployment-exit probabilities. Unlike any previous paper in this literature, we develop a complete dynamic statistical model that allows us to measure the contribution of different shocks to the short-run, medium-run, and long-run variance of unemployment as well as to specific historical episodes. We find that changes in the inflows of newly unemployed are the key driver of economic recessions and identify an increase in permanent job loss as the most important factor.

Published: Hie Joo Ahn & James D. Hamilton, 2020. "Heterogeneity and Unemployment Dynamics," Journal of Business & Economic Statistics, vol 38(3), pages 554-569.

 
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