Monthly Labor Review • April 2009 

Labor Force Flows

Trends in labor force flows

during recent recessions

An analysis of labor force status flows reveals that the current

recession, characterized by the slowing of flows into employment,

differs from the recession of 2001 and most earlier recessions,

which were marked more by increasing flows out of employment

Harley J. Frazis 

and

Randy E. Ilg 

Harley J. Frazis is a research 

economist, and Randy E. Ilg is 

an economist, in the Office of 

Employment and Unemployment 

Statistics, Bureau of Labor Statistics. E-mail: frazis.harley@bls.gov 

or ilg.randy@bls.gov

T 

  he Current Population Survey

(CPS)isthe Federal Government’s

main source of information on

the labor force status of the population.

Employment and unemployment estimates derived from the CPS are watched

closely each month to gauge the health

of the labor market. During periods of

economic weakness, unemployment rises

and the employment-population ratio declines. Chart 1 shows the unemployment

rate and the employment-population ratio from January 1990 to December 2008.

From a recent low point of 4.4 percent in

March 2007, the jobless rate increased by

2.8 percentage points, to 7.2 percent in

December 2008. Over the same period,

the employment-population ratio declined by 2.3 percentage points, to 61.0

percent.

The sources of the changes in these two

measures, however, are not as readily apparent from the published CPS data. Are

more persons exiting employment, or are

fewer entering? Are more persons becoming jobless, or are those currently unemployed exiting unemployment at a slower

rate?

Since October 2007, the Bureau of Labor Statistics (BLS) has produced a set of

research series of labor force status flows

that measure the month-to-month movements of individuals as they change their labor

force status between employment and unemployment or enter or leave the labor market.

These series extend from February 1990 to the

present.This article uses those series to examine the sources of changes in employment and

unemployment in labor market downturns

since the 1990s.

The series measure the number of individuals in each of the three labor force states of

employment (E), unemployment (U), or not in

the labor force (N) in a given month who are

in each labor force state in the next month.The

set of possibilities for moving between labor

force states can be expressed in the following

3 × 3 matrix:

Status in current month

Statusn   Not in 

previous month Employed Unemployed labor force

Employed.......... EE EU EN

Unemployed...... UE UU UN

Not in the labor

force................. NE NU 

The first letter in each cell of the matrix represents the labor force status of an individua

the previous month, the second letter the status in the current month.The cells on the main

diagonal of the matrix (EE, UU, and NN) represent individuals who remained in the same

labor force state over the month. The cells off

the diagonal (EU, EN, UE, UN, NE, and NU) ac-
Labor Force Flows

 Monthly Labor Review • April 2009

count for most of the change in the published labor force

estimates.(The scope of the CPS is the civilian noninstitutional population aged 16 years and older. In addition to

the flows shown in the matrix,there are smaller flows into

and out of the scope of the CPS.These flows are relatively

constant over time, and for the most part, they are not

discussed in this article.1) As an example of the magnitude

of the flows, about 16 million individuals, or 6.7 percent

of the population aged 16 years and older, changed their

labor force status in an average month in 2008.Nearly 5.8

million individuals entered the labor force in an average

month, about equal to the number of persons that left the

labor force. About 5.7 million entered employment in an

average month, and 6.0 million exited. Finally, 4.2 million

individuals entered unemployment each month, and 4.0

million individuals left unemployment. 2

To describe trends in flows during recessions, periods of

relative stability in the labor market—that is, the 6-month

periods just prior to low points in the unemployment

rate—are compared with subsequent periods extending

from unemployment rate troughs to the next peak. The

analysisthat follows of the most recent labor market downturns shows contrasting patterns of labor market flows for

the different downturns.Declining flows into employment

were relatively more important than increasing flows out

of employment in 2007–08 compared with 2001.

Flows into unemployment increased sharply at some

point in all downturns in the series, but in 2007–08 that

increase lagged the trough in the unemployment rate,

with the initial rise in unemployment caused by a decline

in flows out of unemployment. Men and women show

contrasting patterns, with greater increases in exits from

employment and entrances into unemployment for men

than for women in the most recent downturn.

Employment flows

Changes in the employment-population ratio are attributable to changes in the difference in flows into and

out of employment. Relative to a situation in which the

employment-population ratio is stable or increasing, decreases in the ratio can be attributed to a combination

of declining inflows to employment and increasing flows

out of employment.

During the 6-month period prior to March 2007, the

employment-population ratio was relatively stable—within a tenth of a percentage point of its March 2007 value of

63.3 percent. Which flows changed to cause the ratio to

drop after a period of stability?

Chart 2 shows flows into and out of employment from

Unemployment 

rate (percent)

 Chart 1. Unemployment rate and employment-population ratio, seasonally adjusted, 1990–2008 

8

7

6

5

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

65

6

6

62

61

60

Unemployment rate

 Employmentpopulation ratio

Employmentpopulation 

ratio (percent)
Monthly Labor Review • April 2009

other labor force states. The outflow series combines

flows from employment to unemployment (EU) and from

employment to not in the labor force (EN). The inflow

series shows flows from unemployment to employment

(UE) and from not in the labor force to employment (NE).

Because the flow data are quite volatile from month to

month, the data presented in charts 2–10 are based on

6-month moving averages for legibility. Chart 2 shows

that employment inflows and outflows were quite close in

magnitude from March 2007 to early 2008, after which

the two series diverged because of increases in outflows

and decreases in inflows. As the chart also shows, inflows

to employment declined sharply early in 2007. Outflows

from employment declined as well, but not to the same

extent, and only partially counteracted the decline in

inflows.

Table 1 summarizes flow magnitudes over time. The

sixth row of the table shows that, from the most recent

unemployment rate trough in March 2007 to December

2008, outflows exceeded inflows by about 170 thousand

per month,so the employment-population ratio declined.

Comparing the flows for the 6 months before March

2007 to the period from March 2007 to December 2008

shows that inflows declined by an average of 416,000

while outflows declined by an average of 73,000. Thus,

the decline in the employment-population ratio over the

period as a whole was due entirely to declines in flows

into employment.

The behavior of employment(and unemployment) flows

differs for different periods after March 2007. As shown

both in chart 2 and in the last three rows of each panel

(total, men, and women) in table 1, flows into employment declined between March and August 2007. Flows

into and out of employment were relatively stable between

August 2007 and February 2008, with the difference between them narrowing. Consequently, the employmentpopulation ratio decreased only slightly, by 0.1 percentage

point, during this period, after declining by 0.5 percentage

point in the 5 months between March and August 2007.

(Table 1 shows that inflows slightly exceeded outflows in

the August 2007–February 2008 period. Note that the

net effect of flows into and out of the civilian noninstitutional population aged 16 years and older, not shown in

the table or in any of the charts in this article, is to reduce

the employment-population ratio, because much of the inflow consists of 15-year-olds turning 16.These individuals

tend to be employed at a much lower rate than the general

population. Thus, inflows from other labor force states to

employment need to be greater than the corresponding

outflows in order for the employment-population ratio

 Chart 2. Inflows to and outflows from employment, seasonally adjusted 6-month moving average, 1990–2008 

6,200

6,000

5,800

5,600

5,40

5,200

5,000

4,80

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs.

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Thousands

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

Inflows to employment

(UE + NE)

Outflows from employment

(EU + EN)

6,200

6,000

5,800

5,600

5,40

5,200

5,000

4,80

Thousands
Labor Force Flows

  Monthly Labor Review • Apri  20

to remain stable.) Flows out of employment accelerated

sharply from February 2008 to December 2008, while the

decline in inflows into employment continued and the

employment-population ratio decreased by 1.7 points.

Comparisons with the other recessions examined are

instructive.Because the focus of this article is on the labor

market, in all cases the period immediately preceding the

low point in the unemployment rate is compared with the

Table 1. Change in the employment-population ratio and labor force status flows for selected periods preceding and

 during the last two major recessions and the current recession, by sex, seasonally adjusted

[Numbers in thousands]

Inflows to employment Outflows from employment

Average Average

 Period monthly Average UE Average NE monthly Average EU Average EN

inflows flows flows outflows flows flows

(UE + NE) (EU + EN) 

 

 Total

January 1990 to June 1990 ........................ ... 5,099 1,959 3,140 5,173 1,7

June 1990 to June 1992............................... –1.4 4,993 2,080 2,912 5,076 1,

June 2000 to December 2000 ................... ... 5,478 1,814 3,663 5,442 

December 2000 to June 2003 ................... –2.1 5,711 2,033 3,679 5,785 1,92

September 2006 to March 2007............... ... 6,172 2,011 4,161 5,998 1,809 4

March 2007 to December 2008................ –2.3 5,756 2,003 3,753 5,925 1

March 2007 to August 2007................... –.5 5,745 1,887 3,858 5,916 1,754

August 2007 to February 2008.............. –.1 5,847 1,963 3,884 5,765 1,

February 2008 to December 2008 ....... –1.7 5,706 2,085 3,622 6,027 2,163

 Men

January 1990 to June 1990 ........................ ... 2,374 1,141 1,233 2,412 1,

June 1990 to June 1992............................... –2.3 2,444 1,274 1,170 2,506 1,

June 2000 to December 2000 ................... ... 2,563 983 1,580 2,550 912 

December 2000 to June 2003 ................... –3.0 2,746 1,166 1,579 2,802 1,135 1

September 2006 to March 2007............... ... 2,902 1,142 1,760 2,862 1,089 1,77

 March 2007 to December 2008................. –3.4 2,788 1,177 1,611 2,920 1,197 1

March 2007 to August 2007................... –.7 2,756 1,100 1,656 2,851 1,033 1,

August 2007 to February 2008.............. .0 2,841 1,146 1,695 2,794 1,070 

February 2008 to December 2008 ....... –2.7 2,772 1,235 1,537 3,031 1,356

 Women

January 1990 to June 1990 ........................ ... 2,726 818 1,907 2,761 699 2,062

June 1990 to June 1992............................... –.7 2,548 806 1,742 2,570 712 1,8

June 2000 to December 2000 ................... ... 2,915 832 2,084 2,892 684 

December 2000 to June 2003 ................... –1.2 2,966 866 2,099 2,984 791 2

September 2006 to March 2007............... ...  3,269 868 2,401 3,137 72

March 2007 to December 2008................ –1.2 2,968 826 2,142 3,005 765 2

March 2007 to August 2007................... –.4 2,989 788 2,202 3,065 72

August 2007 to February 2008.............. .0  3,006 817 2,188 2,971 730 2

February 2008 to December 2008 ....... –.8 2,934 850 2,085 2,995 807 2,

    

Percentage-point 

change in 

employmentpopulation ratio 

from low point to 

high point in 

unemployment

rate series

Table 1.

NOTE: Flow data represent the change in level of the flow from the previous month to the current month (for example, January to February, February 

to March, and so forth). The series low and high points refer to the overall unemployment rate.
Monthly Labor Review • April 2009

period from the low point to the next peak. For all three

recessions, the unemployment rate trough was before the

official start of the recession as determined the National

Bureau of Economic Research, by periods ranging from 1

month in 1990 to 9 months in 2007.

In the recession of 2001, the unemployment rate was

3.9 percent at its trough in December 2000 and increased

to 6.3 percent by June 2003. (The recession officially began in March 2001.) The employment-population ratio

declined from 64.4 percent to 62.3 percent over the same

period. The recent changes in flows into and out of employment contrast sharply with the pattern found in the

2001 downturn, but are somewhat similar to that of the

1990-92 recession. As can be seen in chart 2, flows out of

employment increased in 2001.Unlike the situation in the

recent downturn, flows into employment also increased,

though not enough to counteract the rise in outflows.

In the early 1990s, the unemployment rate reached

a low point of 5.2 percent in June 1990, from which it

increased to a high of 7.8 percent by June 1992.The employment-population ratio decreased from 62.9 percent to

61.5 percent over the same period. (The peak in the ratio

occurred slightly earlier, in March 1990.) Comparing the

period from February 1990 to June 1990 with the period

from June 1990 to the unemployment peak in June 1992

reveals declines in both inflows to and outflows from employment, a pattern of declines similar to that in the current recession. The small differences between the change

in outflows and the change in inflows shown in the first

two rows of table 1 implies only a slight acceleration in the

decline of the employment-population ratio; the ratio had

already started declining before June 1990. Unfortunately,

data limitations do not allow a comparison of the period

before February 1990 with the 1990-92 downturn.

Recall that chart 2 shows flows as levels rather than as

a percentage of the population, so flows will trend upward

with population growth. However,the decline in flows into

employment is more pronounced when flows are shown

as a percentage of the population. The 6-month average

flow into employment as of December 2008 is 2.43 percent, a series low (tied with October 2008).The difference

between this 6-month average flow and the series average

of 2.60 percent is equivalent to a decline of approximately

400 thousand per month at the December 2008 population

level. As of then, the 6-month average flow out of employment was 2.61 percent of the population, well below the

series maximum for the 6-month average of 2.78 percent

set in August 2001.

Combining the flows into and out of employment masks

movements in the individual flows.The top panel of chart 3

separatesthe flows out of employment into EU and EN flows.

For legibility, each flow has its own vertical axis, although,

for comparability,the scale is the same.The EN flow declines

more or less continuously from early 2007 forward.The EU

flow is relatively stable in 2007,but turns up sharply in 2008.

Summarizing the effects over the downturn, the last two

columns of table 1 show that the small decline in outflows

from employment from March 2007 through December

2008 is the result of two countervailing effects: more people

going from employment to unemployment (an increase in

the EU flow), counteracted by fewer people leaving their jobs

to exit the labor force (a decrease in the EN flow).As shown

in the ninth row of the table, the increase in the EU flow

dominates after February 2008. In contrast, in early 2001

both the EU and EN flows increased substantially, although

chart 3 shows that the EN flow declined from its peak late in

2001.During the 1990–92 downturn,the EU flow increased

and the EN flow decreased, movement broadly similar to

that of the current period.

The bottom panel of chart 3 displays the individual

flows into employment. The NE flow was the main contributor to the decline in flows into employment, although both the UE and NE flows declined in early 2007.

The increase in the UE flow from mid-2007 forward was,

in some sense, an artifact of the increase in the number

of unemployed, from 6.7 million in March 2007 to 11.1

million in December 2008.As the number of unemployed

increases, the UE flow also will increase (in absolute numbers and as a percentage of the population) if the proportion of unemployed who find jobs in the next month

does not decline too sharply. As shown later in chart 7,

this proportion has, in fact, been declining throughout the

current period of labor market weakness.

In 2001, the same basic pattern of flows into employment is observed, with the UE flow increasing (once again,

an artifact of the increase in the number of unemployed)

and the NE flow decreasing. However, as shown in chart

3 (bottom panel), the increase in the UE flow was much

more pronounced and the decrease in the NE flow less pronounced, with the latter not starting until late 2001. The

slight increase in the NE flow shown in table 1 between late

2000 and 2001–03 also was an artifact of the increase in

the number of persons not in the labor force.The 1990–92

downturn shows the same basic pattern of decreasing NE

flows and increasing UE flows as does the 2007–08 period.

Unemployment flows

Chart 4 shows flows into and out of unemployment, combining the EU and NU flows for the inflows and the UE
Labor Force Flows

  Monthly Labor Review • Apri  20

Flow from unemployment to

employment (UE)

Flow from not in the labor 

force to employment (NE)

EU

(thousands)

 Chart 3. Outflows from employment (EU and EN) and inflows to employment (UE and NE), seasonally adjusted 

6-month moving average, 1990–2008 

2,800

2,600

2,40

2,200

2,000

1,800

1,600

1,40

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

EN

(thousands)

4,20

4,00

3,80

3,60

3,4

3,20

3,00

2,800

2,600

Outflows

UE

(thousands)

2,800

2,600

2,40

2,200

2,000

1,800

1,600

1,40

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

NE

(thousands)

4,20

4,00

3,80

3,60

3,4

3,20

3,00

2,800

2,600

Inflows

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Flow from employment to not 

in the labor force (EN)

Flow from employment to

unemployment (EU)
Monthly Labor Review • April 2009

and UN flows for the outflows. In the 21-month period

from March 2007 to December 2008, unemployment increased by 4.4 million, from 6.7 million to 11.1 million.

Table 2 summarizes unemployment flows for selected periods. For the aforementioned 21-month period, relative

to the preceding 6-month period from September 2006

through March 2007, when the labor market was stable,

table 2 shows that flows into unemployment increased by

370,000 while outflows from unemployment rose by less

than 140,000.

As shown in chart 4, a slightly different scenario occurred during the economic downturn of the early 1990s

and again during the recession of 2001.In each case, both

inflows to unemployment and outflows from unemployment rose at the onset of each of the recessions and continued to rise, for the most part, for the duration of the

recession and beyond. The pattern observed during the

current recession becomes even more distinct from that

seen in earlier downturns when it is divided into three

subperiods: from March 2007 to August 2007, from August 2007 to February 2008, and from February 2008 to

December 2008. During the first of these subperiods, unemployment rose because flows out of unemployment declined much more than did flows into unemployment. In

contrast, increased flows into unemployment contributed

to the rise in unemployment at the onset of earlier downturns. From March 2007 to August 2007, unemployment

rose by about 400,000 and the jobless rate edged up by

0.3 percentage point. Compared with flows during the

preceding 6-month period, flows into unemployment

declined by an average of about 60 thousand per month

and average flows out of unemployment fell by two-anda-half times that amount.

From August 2007 to February 2008, both outflows

and inflows increased,with outflows increasing by slightly

more than inflows, and the unemployment rate changed

marginally, by 0.1 percentage point. During the period

from February 2008 through December 2008, however,

inflows to unemployment increased dramatically, averaging over 700,000 more than during the earlier period, as

shown in table 2; the pattern is visible in chart 4. As a

result, the surge in inflows to unemployment produced a

sharp rise in the jobless rate.

Chart 5 shows the separate unemployment inflows (top

Thousands

 Chart 4. Inflows to and outflows from unemployment, seasonally adjusted 6-month moving average, 

4,80

4,60

4,4

4,20

4,00

3,80

3,60

3,4

3,20

3,00

2,800

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Outflows from

unemployment (UE + UN)

Inflows to unemployment 

(EU + NU)

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    an  

1990–2008

4,80

4,60

4,4

4,20

4,00

3,80

3,60

3,4

3,20

3,00

2,800

Thousands
Labor Force Flows

10 Monthly Labor Review • April 2009

Table 2.

 

 

 

 

 Total 

January 1990 to June 1990 ........................... ...  3,294 1,781 1,513 3,344

June 1990 to June 1992.................................. 2.6  3,758 1,973 1,785 3,639 2,08

June 2000 to December 2000 ...................... ...  3,121 1,596 1,525 3,151 1,8

December 2000 to June 2003 ...................... 2.4 3,807 1,925 1,882 3,710 2,

September 2006 to March 2007.................. ...  3,577 1,809 1,768 3,626 2,011 1

March 2007 to December 2008................... 2.8  3,947 1,962 1,985 3,762 2,00

March 2007 to August 2007...................... .3 3,514 1,754 1,761 3,462 1

August 2007 to February 2008................. .1  3,633 1,800 1,833 3,602

February 2008 to December 2008 .......... 2.4 4,352 2,163 2,189 4,008 2,

 Men

January 1990 to June 1990 ........................... ... 1,679 1,082 597 1,705 1,141 5

June 1990 to June 1992.................................. 3.0 2,007 1,261 746 1,929 1,27

June 2000 to December 2000 ...................... ... 1,600 912 689 1,590 983 6

December 2000 to June 2003 ...................... 2.7 2,018 1,135 883 1,958 1,166

September 2006 to March 2007.................. ... 1,932 1,089 843 1,924 1,

March 2007 to December 2008................... 3.4 2,137 1,197 939 2,018 1,

March 2007 to August 2007...................... .2 1,856 1,033 824 1,838 1,

August 2007 to February 2008................. .2 1,912 1,070 842 1,891 1,146 7

 February 2008 to December 2008 .......... 3.0 2,412 1,356 1,056 2,183 1

 Women

 

January 1990 to June 1990 ........................... ... 1,615 699 916 1,640 818 82

June 1990 to June 1992.................................. 2.1 1,751 712 1,038 1,710 806 9

June 2000 to December 2000 ...................... ... 1,520 684 836 1,561 832

December 2000 to June 2003 ...................... 2.1 1,789 791 999 1,752 866 88

September 2006 to March 2007.................. ... 1,645 720 925 1,702 868 

March 2007 to December 2008................... 2.1 1,810 765 1,045 1,744 826

March 2007 to August 2007...................... .3 1,658 721 937 1,624 78

 August 2007 to February 2008................ .1 1,721 730 991 1,711 817 8

 February 2008 to December 2008 ......... 1.7 1,940 807 1,133 1,825 850

 

 

 

Average 

monthly

outflows 

(UE + UN)

Average EU

 flows

Average UE

 flows

NOTE: Flow data represent the change in level of the flow from the previous month to the current month (for example, January to February, February 

to March, and so forth). The series low and high points refer to the overall unemployment rate.

Percentage-point 

change in

unemployment 

rate from series

low point to 

series high point

Table 2.

Average UN

Change in the unemployment rate and labor force status flows for selected periods preceding and during the last 

 two major recessions and the current recession, by sex, seasonally adjusted

[Numbers in thousands]

 Period

 Inflows to unemployment Outflows from unemployment

flows

Average NU

flows

Average

monthly

inflows

(EU + NU)
Monthly Labor Review • April 2009 11

Thousands

 Chart 5. Inflows to unemployment (NU and EU), and outflows from unemployment (UE and UN), 

seasonally adjusted 6-month moving average, 1990–2008

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

Flow from employment to

unemployment (EU)

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

Flow from not in the labor force to 

unemployment (NU)

Inflows

Thousands

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Outflows

Flow from unemployment to

employment (UE)

Flow from unemployment to

not in the labor force (UN)

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

Thousands

Thousands

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000
Labor Force Flows

12 Monthly Labor Review • April 2009

panel) and outflows(bottom panel).The stability of inflows

to unemployment during early to mid-2007 is shared by

its component flows, EU and NU. Both components of

outflows from unemployment, UE and UN, decreased,

producing the decline in outflows already noted. During

the other recessions shown in this chart, all of these flows

increased. Given the earlier description of flows into and

out of employment, this pattern makes sense, because

the EU flow is a component of employment outflows and

unemployment inflows and the UE flow is a component

of employment inflows and unemployment outflows.The

initial decline in job creation and employment inflows led

to a corresponding decline in unemployment outflows as

the UE flow declined.

The sharp increase in flows into unemployment after

February 2008 reflects increases in both the EU flow (noted earlier) and the NU flow. The increase in the NU flow

also reflects slow job creation, as a larger share of persons

entering the labor market failed to find a job in the first

few weeks of searching. Chart 6 shows the percentage of

persons moving into the labor force (that is, NE and NU

flows) who were unemployed in the month of entry. As

can be seen, this share increased in all three recessions.

As shown in chart 4, flows out of unemployment have

increased in periods of labor market weakness, although

with some delay in the current period. However,the number of unemployed also increased during these times, so

it is not immediately clear whether unemployed persons

have a higher probability of exiting unemployment during

labor market downturns. As shown in chart 7, the share

of the unemployed who remained unemployed (UU) rose

sharply during each of the last two downturns and for an

extended length of time in their aftermath; it also rose

sharply during 2008. At the same time, the share of the

unemployed who became employed (UE) declined during these recessionary periods and began to rise only after

economic activity picked up.

Men’s and women’s labor force flows

The unemployment rate for both men and women increased from March 2007 to December 2008, from 4.5

percent to 7.9 percent for men and from 4.3 percent to 6.4

percent for women.The women’s labor force participation

Percent

 Chart 6. Flows from not in the labor force to unemployment (NU), as a percentage of labor force entrants 

(NU + NE), seasonally adjusted 6-month moving average, 1990–2008 

60.0

50.0

40.

30.

20.0

Jan 1990 Jan 1992 Jan 1994 Jan 1996 Jan 1998 Jan 2000 Jan 2002 Jan 200  Jan 200  Jan 20

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

NU/(NU + NE)

Percent

60.0

50.0

40.

30.

20.0
Monthly Labor Review • April 2009 1

Percent

 Chart 7. Share of the unemployed who became employed, remained unemployed, or left the labor force, 

seasonally adjusted 6-month moving average, 1990–2008

70

60

50

4

3

20

10

0

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Jan 1990 Jan 1992 Jan 1994 Jan 1996 Jan 1998 Jan 2000 Jan 2002 Jan 200  Jan 200  Jan 20

Remained unemployed (UU)

Became employed (UE)

Left the labor force (UN)

Percent

70

60

50

4

3

20

10

0

rate was unchanged at 59.5 percent, and the proportion of

women employed declined by 1.2 percentage point, from

56.9 percent to 55.7 percent.In contrast, men’s labor force

participation fell from 73.4 percent to 72.4 percent and

the proportion of men employed declined by 3.4 percentage points, from 70.1 percent to 66.7 percent. Accordingly, the net decline in the overall employment-population

ratio can be attributed mostly to men.

Chart 8 shows flows out of employment (top panel) and

flows into employment (bottom panel), both broken down

by sex. During the current recession, flows out of employment were essentially flat for men until 2008, when they

increased substantially.Flows out of employment declined

significantly for women in 2007. Most of the decline in

flows out of employment in the periods from March 2007

to August 2007 and from August 2007 to February 2008

was accounted for by women, as is seen by comparing the

relevant rows in table 1. Flows into employment declined

for both sexes, but more for women.This pattern was similar to that exhibited in the 1990–92 recession, except that

during that recession (after a brief period of decline for

both sexes) outflows from and inflows into employment

increased for men while they declined for women. The

2001 recession showed greater increases in both outflows

and inflows for men than for women.

The top panel of chart 9 shows the separate EU and

EN flows, broken down by sex. The trends in the flows

for the current labor market downturn are strikingly dissimilar between men and women. For men, a substantial

increase in the EU flow was somewhat offset by a small

decrease in the EN flow in 2008. In contrast, there was

a substantial decrease in women exiting the labor force

from employment in 2007 and a smaller uptick in the EU

flow in 2008. This pattern is once again quite similar to

that of the 1990–92 recession: men accounted for most of

the increase in the EU flow, while women accounted for

most of the decline in the EN flow. (Changes in the separate flows into employment are similar in pattern between

men and women and are not charted here.)

Chart 10 shows the flows out of unemployment (top

panel) and the flows into unemployment (bottom panel),

both broken out by sex. Flows out of unemployment exhibit roughly similar patterns for men and women. Men’s

outflows generally increase more than women’s during pe-
Labor Force Flows

14 Monthly Labor Review • Apri  20

Thousands

 Chart 8. Outflows from employment (EU and EN) and inflows to employment (UE and NE), by sex, seasonally 

adjusted, 6-month moving average, 1990–2008

3,4

3,20

3,00

2,800

2,600

2,40

2,200

2,000

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

Outflows

Outflows from

employment (women)

Outflows from

employment (men)

Thousands

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

3,4

3,20

3,00

2,800

2,600

2,40

2,200

2,000

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

Inflows

Inflows to

employment (men)

Inflows to

employment (women)

Thousands

3,4

3,20

3,00

2,800

2,600

2,40

2,200

2,000

Thousands

3,4

3,20

3,00

2,800

2,600

2,40

2,200

2,000
Monthly Labor Review • April 2009 15

 Chart 9. Outflows from employment (EU and EN) and inflows to unemployment (EU) and NU), by type 

and sex, seasonally adjusted 6-month moving average ,1990–2008

Thousands

1,500

1,40

1,30

1,200

1,100

1,000

900

800

700

600

500

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

EU (men)

NU (women)

EU (women)

NU (men)

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Inflows

Thousands

1,500

1,40

1,30

1,200

1,100

1,000

900

800

700

600

500

Thousands

2,600

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

800

600

Jan 1990 Jan 1992 Jan 1994  Jan 199  Jan 199  Jan 200  Jan 200  Jan 20    Jan 2    Jan 

EN (men)

EN (women)

EU (women)

EU (men)

Outflows

Thousands

2,600

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

800

600
Labor Force Flows

16 Monthly Labor Review • April 2009

Thousands

 Chart 10. Outflows from unemployment (UE + UN) and inflows to unemployment (EU + NU), by sex, 

seasonally adjusted 6-month moving average, 1990–2008 

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

Jan 1990 Jan 1992 Jan 1994 Jan 1996 Jan 1998 Jan 2000 Jan 2002 Jan 200  Jan 200  Jan 20

UE + UN (men)

UE + UN (women)

NOTE: Shaded regions represent recessions as designated by the National Bureau of Economic Research. Vertical lines indicate unemployment 

rate troughs. 

SOURCE: Bureau of Labor Statistics, Current Population Survey.

Thousands

2,800

2,600

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

Jan 1990 Jan 1992 Jan 1994 Jan 1996 Jan 1998 Jan 2000 Jan 2002 Jan 200  Jan 200  Jan 20

Inflows

EU + NU (men)

EU + NU (women)

Outflows

Thousands

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000

Thousands

2,800

2,600

2,40

2,200

2,000

1,800

1,600

1,40

1,200

1,000
Monthly Labor Review • April 2009 17

riods of labor market weakness, but this also is true of the

inflows. There is one exception in the current period: the

decline in exits from unemployment after the trough in the

unemploymentrate in March 2007 is present for both sexes.

Comparing the period from March 2007 to August 2007

with the period from February 2008 to December 2008

reveals that men’s outflows from unemployment increased

by an average of 345,000, as opposed to an average of about

200,000 for women, as shown in table 2.In contrast, men’s

inflows to unemployment show a much more dramatic increase over the same period: an average of about 550 thousand, compared with an average of about 280 thousand for

women.This difference is attributable to the larger relative

increase in the EU flow for men mentioned earlier.The NU

flow shows a similar pattern between the sexes after 2007,

although women display a more continuous increase while

men exhibit a larger increase after early 2008. (See bottom

panel of chart 9.)

Comparison with other research

How do the patterns discussed in this article compare with

those found in earlier papers? Some researchers have used

other adjustment techniques to produce series that enable

them to investigate recessions before 1990. For example,

Olivier Blanchard and Peter Diamond analyzed series

from 1968 through May 1986, and Shigeru Fujita and

Garey Ramey created a series that incorporated data from

1976 through 2005.3 Both of these papers adjusted flows by

means of a technique borrowed from John M. Abowd and

Arnold Zellner that, on average, adjusts for the discrepancy

between stocks and flows found in the unadjusted data.4

(Unlike the current BLS research series, however, the adjusted series do not exactly match for any given month.)

The earlier series show that earlier recessions followed

a pattern more typical of the 2001 recession than of the

current downturn. Summarizing the four recessions captured in their data,5 Blanchard and Diamond estimated

that flows out of employment were more responsive to recessions than were flows into employment.6 This conclusion contrasts sharply with the finding here of the importance of declining flows into employment in the current

downturn. The general pattern of the individual flows is

similar to that of the current downturn described here, but

the relative magnitudes are different: EU flows typically

increased by more, and earlier in the recession, than EN

flows decreased, and they typically increased much more

than NU flows.7 By contrast,the results in this article show

NU flows and EU flows increasing roughly equally.

Fujita and Ramey’s results are similar to those of

Blanchard and Diamond, and the two pairs of authors

come to the same general conclusions. However, Fujita

and Ramey’s graphs show that the 1990 recession (which

was too recent to have been included by Blanchard and

Diamond) was dominated by decreases in flows into employment rather than increases in flows out of employment.8 (Fujita and Ramey do not mention this in their

text,which stresses EU flows more than broader flows into

and out of employment. Like the results presented here,

Fujita and Ramey’s series indicate an increase in the EU

flow during the 1990 recession, even though they show

little overall increase in flows out of employment.)

USING A SET OF RECENTLY DEVELOPED data

series that extend from 1990 to the present, this article

has examined labor force status flows during the current

labor market downturn and compared them with flows

in and around other recent economic downturns. One of

the most striking features of the current downturn is the

slowing of flows into employment, in contrast to the 2001

recession and most earlier recessions, which were marked

to a greater extent by increased flows out of employment.

Similarly, the early part of the current period of weakness

was marked by a decrease in flows out of unemployment,

rather than the usual increase in flows into unemployment—although, more recently, rising inflows into unemployment have resulted in a jump in the jobless rate.9

Both the decrease in flows into employment throughout

the period from March 2007 to December 2008 and the

decrease in flows out of unemployment in mid-2007 are

consistent with a prolonged slowdown in job creation occurring alongside an increase in job destruction.

A more detailed picture emerged upon analyzing the

flows by sex. The smaller increase in outflows from employment observed in the current period (and also in the

1990–92 recession), compared with the 2001 recession,

was a result of two countervailing factors: increasing EU

flows and decreasing EN flows.Increases in EU flows were

relatively more important for men,whereas declines in EN

flows were more important for women.

Flow data have been compared to moving pictures,

in contrast to the usual “snapshot” numbers that capture

the economy at a point in time. The new flow series allow an examination of the dynamics behind the headline

numbers produced from the CPS. Both similarities with

and differences from previous labor market downturns

emerged from the analysis presented in this article. Explaining the differences and similarities between different

business cycles will undoubtedly become an active area of

research as users become more familiar with flow data.
Labor Force Flows

18 Monthly Labor Review • April 2009

Notes

1 For more details, see Harley J. Frazis, Edwin L. Robison,Thomas D. Evans, and Martha A. Duff,“Estimating gross flows consistent with stocks in the

CPS,”Monthly Labor Review, September 2005, pp. 3–9; on the Internet at www.

bls.gov/opub/mlr/2005/09/art1full.pdf (visited Feb. 27, 2009).

2 For more information on labor force status flows, see Zhi Boon, Charles

M. Carson, R. Jason Faberman, and Randy E. Ilg, “Studying the labor market using BLS labor dynamics data,” Monthly Labor Review, February 2008, pp.

3–16, on the Internet at www.bls.gov/opub/mlr/2008/02/art1full.pdf (visited Mar. 3, 2009); and Randy E. Ilg, “Analyzing CPS data using gross flows,”

Monthly Labor Review, September 2005, pp. 10–18, on the Internet at www.bls.

gov/opub/mlr/2005/09/art2full.pdf (visited Mar. 3, 2009). For more on the

concepts and estimation associated with gross flow data, see Frazis, Robison,

Evans, and Duff,“Estimating Gross Flows.”Additional information on the new

research series on labor force status flows is presented in “New research series

on labor force status flows from the Current Population Survey,”in Labor Force 

Statistics from the Current Population Survey (Bureau of Labor Statistics, May 2,

2008), on the Internet at stats.bls.gov/cps/cps_flows.htm.

3 See Olivier Blanchard and Peter Diamond, “The Cyclical Behavior of

the Gross Flows of U.S. Workers,” Brookings Papers on Economic Activity, no.

2, 1990, pp. 85–143; and Shigeru Fujita and Garey Ramey, “The Cyclicality of

Job Loss and Hiring,” Federal Reserve Bank of Philadelphia Working Paper,

November 2006.

4 John M. Abowd and Arnold Zellner, “Estimating Gross Labor-Force

Flows,”Journal of Business and Economic Statistics, July 1985, pp. 254–83.

5 The cyclical peaks were in 1969, 1973, 1980, and 1981.

6 See their Figure 5, p. 104.

7 See their Figure 9, p. 117.

8 See their Figures 15 and 16, pp. 46–47.

9 See Ilg, “Analyzing CPS data,” for other information on unemployment

flows in previous recessions.See also “Why Has Unemployment Risen? Insight

From Labor Force Flows,” Issues in Labor Statistics, Summary 08–05 (Bureau

of Labor Statistics, June 2008); on the Internet at www.bls.gov/opub/ils/pdf/

opbils66.pdf (visited Mar. 4, 2009).