Title: Distributional Impact of the Great Recession on Industry Unemployment for 1976-2011
Abstract: The recession the United States economy entered in December of 2007 is considered to be the most severe downturn the country has experienced since the Great Depression. In this paper we decompose the changes in the unemployment rate by examining worker flows into and out of unemployment during the last four recessions in the United States with a special focus on the industry groups. Since the most recent economic downturn has been triggered by the collapse of the housing market, we are interested in looking at the industries that are most affected by the housing market weakness (such as construction and finance, insurance and real estate). In addition to documenting and comparing industry experiences and industry contributions to the aggregate unemployment rate changes, we attempt to evaluate the relative importance of cyclical and structural forces driving industry-specific unemployment rate changes. This question is of importance to policymakers as cyclical and structural changes call for different policy responses.