Labor Market Dysfunction During the Great Recession / Kyle F. Herkenhoff, Lee E. Ohanian.

Format:

Book

Author/Creator:

Herkenhoff, Kyle F.

Contributor:

National Bureau of Economic Research.

Ohanian, Lee E.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17313.

NBER working paper series no. w17313

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

This paper documents the abnormally slow recovery in the labor market during the Great Recession, and analyzes how mortgage modification policies contributed to delayed recovery. By making modifications means-tested by reducing mortgage payments based on a borrower's current income, these programs change the incentive for households to relocate from a relatively poor labor market to a better labor market. We find that modifications raise the unemployment rate by about 0.5 percentage points, and reduce output by about 1 percent, reflecting both lower employment and lower productivity, which is the result of individuals losing skills as unemployment duration is longer.

Notes:

Print version record

August 2011.