The JOLTS data provide hree major challenges to any disruptions hypothesis of the Great Recession. That is, any hypothesis that says the United States was engaged in some form of economic production that was disrupted by event X and that led to a huge recession until we could get back on our feet. This includes the vast majority of structural theories.

The first problem is that job destruction fell dramatically during the Great Recession.

FRED Graph

Second, Job Hires are typically very close to separations. However, in late 2008 the two broke apart.

FRED Graph

Even still the gap, though enormous up to 700K was still small in comparison to the low point in hires 3600K.

What’s more is that third, if you look closely at the pattern of separations and hires, it looks like what happened was that separations stalled in late 2008 while hires continued its downward trajectory.



Here I just used a straight line but if you were to follow the logarithmic path of hires you would wind up with an even smaller gap and even fewer job losses to make up for during the recovery.

So, to really get at the heart of everything we not only have to explain why overall churn including separations and hires started to fall – that is why the employment structure of the economy started changing at a slower rate. We also have to answer why the stall

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