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Finance and Economics Discussion Series
Finance and Economics Discussion Series logo links to FEDS home page The Effect of Restructuring on Unemployment
Andrew Figura

Abstract: This paper finds that the permanent job losses associated with industrial restructuring have significantly boosted the variance of unemployment, causing it to rise much higher in recessions than it would have without cyclically correlated restructuring. Moreover, the influence of restructuring has increased noticeably in the 1980s and 1990s, acting to increase economic instability at a time when other factors were operating to reduce it.

Keywords: Restructuring, unemployment, job flows

Full paper (368 KB PDF)

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Last update: November 18, 2003