Trends in Labor Force Flows during Recent Recessions: An Analysis of Labor Force Status Flows Reveals That the Current Recession, Characterized by the Slowing of Flows into Employment, Differs from the Recession of 2001 and Most Earlier Recessions, Which Were Marked More by Increasing Flows out of Employment

By Frazis, Harley J.; Ilg, Randy E. | Monthly Labor Review, April 2009 | Go to article overview

Trends in Labor Force Flows during Recent Recessions: An Analysis of Labor Force Status Flows Reveals That the Current Recession, Characterized by the Slowing of Flows into Employment, Differs from the Recession of 2001 and Most Earlier Recessions, Which Were Marked More by Increasing Flows out of Employment


Frazis, Harley J., Ilg, Randy E., Monthly Labor Review


The Current Population Survey (CPS) is the Federal Government's main source of information on the labor force status of the population. Employment and unemployment estimates derived from the CPS are watched closely each month to gauge the health of the labor market. During periods of economic weakness, unemployment rises and the employment-population ratio declines. Chart 1 shows the unemployment rate and the employment-population ratio from January 1990 to December 2008. From a recent low point of 4.4 percent in March 2007, the jobless rate increased by 2.8 percentage points, to 7.2 percent in December 2008. Over the same period, the employment-population ratio declined by 2.3 percentage points, to 61.0 percent.

The sources of the changes in these two measures, however, are not as readily apparent from the published CPS data. Are more persons exiting employment, or are fewer entering? Are more persons becoming jobless, or are those currently unemployed exiting unemployment at a slower rate?

Since October 2007, the Bureau of Labor Statistics (BLS) has produced a set of research series of labor force status flows that measure the month-to-month movements of individuals as they change their labor force status between employment and unemployment or enter or leave the labor market. These series extend from February 1990 to the present. This article uses those series to examine the sources of changes in employment and unemployment in labor market downturns since the 1990s.

The series measure the number of individuals in each of the three labor force states of employment (E), unemployment (U), or not in the labor force (N) in a given month who are in each labor force state in the next month. The set of possibilities for moving between labor force states can be expressed in the following 3 x 3 matrix:

                            Status in current month

Status in                                       Not in the
previous month      Employed     Unemployed    labor force

Employed               EE            EU            EN
Unemployed             UE            UU            UN
Not in the labor
  force                NE            NU            NN

The first letter in each cell of the matrix represents the labor force status of an individual in the previous month, the second letter the status in the current month. The cells on the main diagonal of the matrix (EE, UU, and NN) represent individuals who remained in the same labor force state over the month. The cells off the diagonal (EU, EN, UE, UN, NE, and NU) account for most of the change in the published labor force estimates. (The scope of the CPS is the civilian noninstitutional population aged 16 years and older. In addition to the flows shown in the matrix, there are smaller flows into and out of the scope of the CPS. These flows are relatively constant over time, and for the most part, they are not discussed in this article. (1)) As an example of the magnitude of the flows, about 16 million individuals, or 6.7 percent of the population aged 16 years and older, changed their labor force status in an average month in 2008. Nearly 5.8 million individuals entered the labor force in an average month, about equal to the number of persons that left the labor force. About 5.7 million entered employment in an average month, and 6.0 million exited. Finally, 4.2 million individuals entered unemployment each month, and 4.0 million individuals left unemployment. (2)

[GRAPHIC 1 OMITTED]

To describe trends in flows during recessions, periods of relative stability in the labor market--that is, the 6-month periods just prior to low points in the unemployment rate--are compared with subsequent periods extending from unemployment rate troughs to the next peak. The analysis that follows of the most recent labor market downturns shows contrasting patterns of labor market flows for the different downturns. Declining flows into employment were relatively more important than increasing flows out of employment in 2007-08 compared with 2001. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Trends in Labor Force Flows during Recent Recessions: An Analysis of Labor Force Status Flows Reveals That the Current Recession, Characterized by the Slowing of Flows into Employment, Differs from the Recession of 2001 and Most Earlier Recessions, Which Were Marked More by Increasing Flows out of Employment
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.