Failing the Test? The Flexible U.S. Job Market in the Great Recession
The Great Recession tested the ability of the "great U.S. jobs machine" to limit the severity of unemployment in a major economic downturn and to restore full employment quickly afterward. In the crisis the American labor market failed to live up to expectations. The level and duration of unemployment increased substantially in the downturn and the growth of jobs was slow and anemic in the recovery. This article documents these failures and their consequences for workers. The U.S. performance in the Great Recession contravenes conventional views of the virtues of market-driven flexibility compared to institution-driven labor adjustments and the notion that weak labor institutions and greater market flexibility offer the best road to economic success in a modern capitalist economy.
The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
R. B. Freeman, 2013. "Failing the Test? The Flexible U.S. Job Market in the Great Recession," The ANNALS of the American Academy of Political and Social Science, vol 650(1), pages 78-97.