Who Suffers During Recessions?

May 24, 2012

The Great Recession generated large reductions in employment, earnings and income for workers and families in the United States.  The seasonally adjusted unemployment rate increased from 5 percent in December 2007 to 9.5 percent in June 2009, and has since seen only modest recovery, say Hilary W. Hoynes, Douglas L. Miller and Jessamyn Schaller, researchers with the National Bureau of Economic Research.

However, these broad statistics fail to show that the ill effects of recessions do not fall upon all members of the population equally.  Specifically, classifications of race, gender, age and educational attainment saw large differentials in how they their employment prospects were worsened by the Great Recession.

Looking to unemployment data between May 2007 and October 2009 (the economic peak-to-trough time period), the researchers saw substantial differences between how the recession affected men and women of the black, white and Hispanic races.

  • Black men saw the largest increase in unemployment (9.50 percent), while white women were least affected, witnessing a mere 3.59 percent increase in unemployment.
  • Though Hispanic women were slightly more affected than Hispanic men (6.46 percent versus 6.09 percent), large losses among white and black men mean that the recession hurt men much worse than women.
  • A possible explanation for this apparent bias is that men are more likely to be employed in industries that are affected by cyclical business cycles, like construction and manufacturing.

The data for differentials between levels of educational attainment and age groups are far less shocking.  In general, the younger a person is and the less education he or she has, the more likely it is that that person was made unemployed by the recession.

  • Workers ages 16-19 saw an unemployment increase of 10.86 percent, ages 20-24 saw 8.76 percent, ages 25-44 saw 5.78 percent, and ages 45-60 saw 3.89 percent.
  • Similarly, workers with only some high school education saw an unemployment increase of 8.12 percent, high school graduates saw 8.28 percent, workers with some college saw 5.17 percent and college graduates saw an unemployment increase of only 2.84 percent.

Source: Hilary W. Hoynes, Douglas L. Miller and Jessamyn Schaller, "Who Suffers During Recessions?" National Bureau of Economic Research, March 2012.

For text:

http://www.nber.org/papers/w17951

 

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