A glance at long-term unemployment in recent recessions

Following the official end ofthe 2001 recession in November 2001, unemployment continued to rise for some 19 months.

The unemployment rate reached

a peak of 6.3 percent in June 2003

before trending down to 5.0 percent in June 2005. Even when

the overall unemployment rate

started to decline, however, there

was no immediate improvement

in the number of unemployed

who had been jobless for 27

weeks or more, often referred to

as the long-term unemployed.

Indeed, it was late 2003 before

long-term unemployment peaked

and early 2004 before it began to

recede. In fact, in the aftermath of

each of the last two recessions,

long-term joblessness continued

to climb far longer than it did during the downturns of the mid1970s and early 1980s.

This report compares the severity and length of long-term

joblessness associated with each of

the last four downturns. In the analysis that follows, the long-term jobless rate is defined as the proportion

of the labor force (rather than of unemployment) that has been unemployed for 27 weeks or longer.1

 In November 1975, the share of

persons jobless for more than half a

year peaked at 2.1 percent of the labor force, 8 months after the end of

the 1973–75 recession.2 In June

1983, 7 months after the official end

of the 1981–82 recession, the longterm jobless rate peaked at 3.1 percent, the highest recorded in the

post-World War II era. Although

the downturn of 1990–91 more

closely resembled that of the mid1970s in terms of the magnitude of

the long-term unemployment rate—

just over 2 percent in October

1992—the rate did not peak until 19

months after the official end of the

recession (March 1991). Following

the 2001 downturn, the long-term

jobless rate peaked at 1.4 percent in

September 2003, 22 months after the

official end. (See chart.)

The most obvious reason for

the slow improvement in longterm unemployment following the

two most recent contractions was

the relatively slower pace of job

growth. Following each of the recessions of the mid-1970s and

early 1980s, employment rose by

1.5 percent within a year. In contrast, employment was virtually

unchanged in the year following

the 1990–91 and 2001 recessions.

As shown in the accompanying

table, even by the time long-term

unemployment had started to decline, employment had risen by 1.0

percent or less. Also, in contrast

to the recessions of the mid-1970s

and early 1980s, the employmentto-population ratio continued to

decline far longer following the recessions of 1990–91 and 2001.

For additional information on

long-term unemployment

and a technical description

of the Current Population

Survey from which the data

used in this report were derived, contact Randy E. Ilg,

Office of Employment and

Unemployment Statistics,

Bureau of Labor Statistics,

Washington, DC 20212. Telephone: (202) 691-6378.E-mail:

ilg.randy@bls.gov.

 Information in this report

will be made available to sensory-impaired individuals

upon request. Voice phone:

(202) 691-5200. Federal Relay Service: 1-800-877-8339.

This report is in the public

domain and may be reproduced without permission.

Summary 06-01 / January 2006 U.S. Department of Labor U.S. Bureau of Labor Statistics

Continued on back

Footnote

1

 The labor force is used as the basis

in this analysis because employment

has trended up over the period from

1970 forward (largely reflecting

population growth), whereas unemployment has risen and fallen

cyclically.

2

 The historical comparison of longterm unemployment was affected by the

introduction of a new questionnaire and

survey methodology in January 1994.

In particular, several changes to the

questionnaire—both definitional and

operational—resulted in differences in the

way the unemployed are distributed

among the categories designating the

reason for unemployment. Research at

the Bureau of Labor Statistics has shown

that the new methodology significantly

increased the proportion of the

unemployed classified as reentrants and

decreased the proportion of the

unemployed in the other categories.

Thus, adjustments have been made to

the data prior to 1994 to make it more

comparable with post-1994.

Chart 1. Persons unemployed 27 or more weeks as a percent of the civilian labor force, seasonally adjusted monthly data, January, 1970–2005

Percent

1970 1975 1980 1985 1990 1995 2000 2005

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Percent

NOTE: Shaded areas represent recessions from December 1969 through November 1970, November 1973 through March 1975, January 

1980 through July 1980, July 1981 through November 1982, Juyl 1990 through March 1991, March 2001 through November 2001.
Table 1. Change in employment and employment-to-population ratio from official end of recession to peak in long-term

unemployment, last four major recessions, seasonally adjusted

Official recession trough Change in Percent

Percentageto peak in long-term employment change in

point

unemployment

Number of

(In thousands) employment

change in

months employmentto-population

ratio

March 1975 to November 1975 ....... 8 1,269 1.5 0.0

November 1982 to June 1983 ......... 7 1,521 1.5 +0.5

March 1991 to October 1992 .......... 19 1,197 1.0 –0.5

November 2001 to

September 2003 ............................. 22 834 0.6 –0.9

NOTE: Employment changes during the 1990–2003 period are calculated from a CPS employment series smoothed to reflect adjustments to population controls.

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