Who loses in the Great Recession? Those groups who lost in the recessions of the 1980s

“The labor market decline during Great Recession and its aftermath has been both deeper and longer than the early 1980s recession—indeed, the longest and deepest since the Great Depression” write Hilary Hoynes, Douglas L. Miller, and Jessamyn Schaller in Who Suffers During Recessions? published on econ.ucdavis.edu. (Adapted excerpts by Job Market Monitor follow)

The labor market effects of the Great Recession have not been not uniform across demographic groups. Men, blacks, Hispanics, youth, and those with lower education levels experience more employment declines and unemployment increases compared to women, whites, prime aged workers, and those with high education levels. However, these dramatic differences in the cyclicality across demographic groups have been remarkably stable since at least the late 1970s and across recessionary periods versus expansionary periods.

These gradients persist despite the dramatic changes in the labor market over the past 30 years, including the increase in labor force attachment for women, Hispanic immigration, the decline of manufacturing, and so on.

The general tone of these findings might be surprising given much emphasis in the press on the “man‐cession”—that is, the greater effect that the Great Recession has had on men. The analysis shows that men, across recessions and recoveries, experience more cyclical labor market outcomes. This is largely the result of their higher propensity to be employed in highly cyclical industries such as construction and manufacturing.

On the other hand, women are more likely to be employed in less cyclical industries such as services and public administration. More generally, much of the difference in the effect of cycles across groups during the 2007 recession is explained by being at greater exposure to the fluctuations due to the industries and occupations that they are employed in.

Although overall the 2007‐2009 recession appears similar to the 1980s recession, it did have somewhat greater responsiveness for women’s employment, and for the youngest and oldest workers. Further, we do find evidence of a “he‐covery;” and the extent to which the current recovery is being experienced more by men than women (compared to the 1980s recovery) is largely due to a drop in women’s cyclicality during the current recovery.

Despite these various distinctions, the overarching picture is one of stability in the demographic patterns of response to the business cycle over time.  Who loses in the Great Recession?  The same groups who lost in the recessions of the 1980s, and who experience weaker labor market outcomes even in the good times.  Viewed through the lens of these demographic patterns across labor markets, the Great Recession is different from business cycles over the three decades earlier in size and length, but not in type.

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