Fairly Recently: Must- and Should-Reads, and Writings... (November 12, 2018)

What is the counterfactual here? The demand factors they are talking about here are all microeconomic and not macroeconomic factors. Thus it seems to me that—unless they are assuming that the Federal Reserve is a potted plants—they affect the distribution of employment but not its overall magnitude. Remember! The economy is a general equilibrium system!: Katharine G. Abraham and Melissa Kearney: The Secular Decline in Us Employment over the Past Two Decades: "This column reviews the evidence on the main causes of the secular decline in employment since the turn of the century. Labour demand factors–notably import competition from China and the rise of industrial robots–emerge as the key drivers. Some labour supply and institutional factors also have contributed to the decline, but to a lesser extent...

...Despite the cyclical recovery, the employment rate among non-elderly adults in the US–60.3% as of August 2018–remains low by historical standards and in comparison to other rich countries. This reflects a secular downward trend in employment that began decades ago for men, and about two decades ago for women. Explanations for this decline abound, including declines in manufacturing employment due to global competition and automation (e.g. Charles et al. 2018), growing reliance on the social safety net (Eberstadt 2016, Council of Economic Advisers 2018), and increased opioid use (Krueger 2017), among other potential factors.   

In a recent paper (Abraham and Kearney 2018), we have evaluated the evidence about the main causes of the secular decline in US employment between 1999 and 2016.1 We first establish the importance of within-group employment rate declines in driving the overall reduction, then consider a wide set of potential explanatory factors for the long-term downward trend. These are the structural issues that will need to be confronted if the decline in employment is to be reversed....

Our critical review of the evidence put forward in over 150 studies identifies labour demand factors as key drivers of the decline in employment between 1999 and 2016. Some labour supply and institutional factors also have contributed to the decline, though to a lesser extent...


#shouldread #labormarket

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