Academic journal article Economic Review - Federal Reserve Bank of Kansas City

Employment Patterns during the Recovery: Who Are Getting the Jobs and Why?

Academic journal article Economic Review - Federal Reserve Bank of Kansas City

Employment Patterns during the Recovery: Who Are Getting the Jobs and Why?

Article excerpt

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Employment in the United States is recovering slowly from the Great Recession. After declining by 8 million in the economic downturn, the number of employed workers has increased by only 1 million thus far in the recovery.

Economists have offered different explanations for this sluggish recovery. Some have posited that the labor market has been weighed down by a mismatch of the jobs being created in the recovery and the available workers. By extension, this reasoning sees the labor market as imposing a constraint on overall growth. Others have argued that cyclical factors are responsible: The weak recovery in the broad economy is holding back the labor market, instead of the reverse.

This article examines the distribution of employment gains in the recovery to shed light on this issue. It finds that employment growth has differed sharply depending on workers' level of education, age, and gender. Workers with high levels of education, workers age 55 and older, and men have experienced the strongest employment gains in the recovery. Workers with less than a high school education and workers ages 25 to 54 have remained stuck in recession and continue to experience employment declines.

The employment patterns appear to reflect two key factors: long-term trends and cyclical fluctuations. The strong employment growth for highly educated and older workers is a continuation of longer term shifts toward a more highly educated workforce and the aging of the baby boom generation. The employment gains for men are associated with men having a stronger cyclical attachment to the labor force when labor market conditions are weak.

The employment patterns based on this analysis do not provide evidence of a mismatch of workers and jobs at this stage of the labor market recovery. The workers in highest demand are those with the most education, yet the population of highly educated workers has increased at a faster rate than employment in the recovery.

The first section of the article describes the employment patterns during the economic recovery. The second section analyzes patterns based on the education level of workers and discusses the factors contributing to these patterns. The third and fourth sections undertake similar analyses of employment growth patterns based on gender and age, respectively.

I. EMPLOYMENT DURING THE RECOVERY

Employment has increased modestly during the labor recovery. Although the economic recovery began in June 2009, as determined by the NBER's Business Cycle Dating Committee, the labor recovery did not start until the end of 2009.1 From January 2010 through August 2011, employment of workers age 16 and older increased by 1.1 million. This increase follows the decline of 7.8 million that occurred in the labor recession, which is measured as starting in December 2007 and ending in January 2010.

The primary data source for employment in this article comes from the Current Population Survey (CPS), commonly referred to as the household survey. The data are collected on a monthly basis from approximately 60 thousand households by the U.S. Census Bureau for the Bureau of Labor Statistics (BLS). The primary advantage of this survey over others is that it contains detailed employment data on various characteristics of workers, including their education, age, and gender.2 The household survey reveals that all of the employment gains during the labor recovery have accrued to workers with at least some college education. Employment for workers with a bachelor's degree or higher has increased by 1.1 million, and employment for workers with some college or an associate's degree has increased by 345 thousand (Table 1). Employment has declined for less-educated workers, by 576 thousand for workers with a high school diploma (or equivalent) but no college, and by 66 thousand for workers with less than a high school diploma.

A sharp distinction also exists for employment growth by gender. …

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