From the Richmond Fed, on structural unemployment

These results are related to what I sometimes call Zero Marginal Product workers:

…a significant part of the increase in long-term unemployment is indeed due to the inflow into unemployment of workers with relatively low job finding rates. We conclude by arguing that given the increased contribution to overall unemployment of unemployed workers with inherently low job finding rates, monetary policymakers may want to exercise caution in the use of policy to respond to the level of unemployment.

The authors are Andreas Hornstein and Thomas A. Lubik.  The entire study — full of useful information — is here, and for the pointer I thank Alex in Jerusalem (we await a report).

Via Scott Sumner, while this is not my favorite structural explanation, I read of this from Siemens:

Siemens had been forced to use more than 30 recruiters and hire staff from other companies to find the workers it needed for its expansion plans, even amid an unemployment rate of 9.1 percent

…a recent survey from Manpower, the employment agency, found that 52 percent of leading US companies reported difficulties in recruiting essential staff, up from 14 percent in 2010.

In manufacturing in particular there is evidence of a mismatch between workforce skills and available jobs: while employment has fallen since January 2009, the number of available job openings has risen from 98,000 to 230,000.

Via Felix Salmon (he pulls out excellent pictures), from the IMF, using cross-country data:

For U.S. long-term unemployment the split between cyclical and structural factors is closer to 60-40, including during the Great Recession.


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