Jobless recovery

Jobless recovery refers to a phenomenon in economics where a macroeconomic recovery occurs after a recession, but the recovery does not include a corresponding recovery in the labor market. This results in high unemployment rates even as economic growth resumes.

Overview

The term "jobless recovery" was first coined in the early 1990s to describe the economic recovery that followed the early 1990s recession. During this period, the GDP growth rate rebounded, but the unemployment rate remained high. This trend has been observed in several subsequent economic recoveries, including the recovery following the Great Recession of 2008.

Causes

There are several potential causes for a jobless recovery. One possibility is that businesses may be hesitant to hire new workers immediately after a recession due to uncertainty about the future of the economy. Instead, they may choose to increase the productivity of their existing workforce or invest in automation or other technologies that can replace human labor.

Another potential cause is structural unemployment, which occurs when there is a mismatch between the skills that workers have and the skills that employers need. This can occur as a result of technological changes, globalization, or other factors that change the types of jobs that are available in the economy.

Implications

A jobless recovery can have significant implications for both individuals and society as a whole. For individuals, prolonged unemployment can lead to financial hardship, loss of skills, and psychological distress. For society, high unemployment rates can lead to increased social inequality, reduced consumer spending, and slower overall economic growth.

See also

• Economic recovery
• Unemployment
• Structural unemployment
• Great Recession