Which Groups Suffer Most in the Labor Market During Recessions?

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[The] groups [that] experienced the greatest employment losses in the Great Recession [were] ... the same groups who lost in the recessions of the 1980s.

In Who Suffers During Recessions? (NBER Working Paper No. 17951), co-authors Hilary Hoynes, Douglas Miller, and Jessamyn Schaller find that the impacts of the Great Recession (December 2007 to June 2009) have been greater for men, for black and Hispanic workers, for young workers, and for less educated workers than for others in the labor market. While the recent recession was deeper than several other recent downturns, the pattern of unemployment and job opportunity cycles across demographic groups has been remarkably stable in recessions since at least the late 1970s. This is the case despite the dramatic changes in the labor market over the past 30 years, including the increase of women in the labor force, Hispanic immigration, the decline of manufacturing, and so on.

Using population survey and national time-series data, Hoynes, Miller, and Schaller find that in terms of job losses, the Great Recession has affected men more than women. But their analysis also shows that in previous recessions and recoveries, men experienced more cyclical labor market outcomes. This is largely because men are more likely to be employed in highly cyclical industries, such as construction and manufacturing. Women are more likely to be employed in less cyclical industries, such as services and public administration. While the pattern of labor market effects across sub-groups in the 2007-9 recession appears similar to that in the two recessions of the early 1980s, it did have a somewhat greater effect on women's employment -- although in this recession as in past recessions, the effects on women were smaller than those on men. The recent recession was felt more strongly among the youngest and oldest workers. Hoynes, Miller, and Schaller further find that relative to the 1980s recovery, the current recovery is being experienced more by men than women largely because of a drop in the cyclicality of women's employment during this recovery.

The researchers conclude that the overall picture is one of stability in the demographic patterns of response to the business cycle over time. Which groups experienced the greatest employment losses in the Great Recession? The same groups who lost in the recessions of the 1980s, and who experience weaker labor market outcomes even in good times. The authors therefore conclude that the labor market effects of the Great Recession were different from those of business cycles over the three previous decades in size and length, but not in type.

--Matt Nesvisky