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The 2007–2009 recession in US / Full-time employment of workers ages 19 to 33 were between 16 and 26 percentage points less finds the BLS

The recession of 2007–2009 resulted in the loss of millions of jobs, although not all sectors of the economy were affected equally. Much has been written about the employment effects of the recession, with many reports focusing on the change in overall or specific sector employment over the course of the recession. However, many of these analyses do not take into account how employment would have changed without the recession.

This article uses a simple projection model to create a counterfactual scenario of where the economy would have been without the recession and compares the results of this model with actual employment changes to see the impact of the recession on total employment, full- and part-time workers, occupational employment, and industry employment.

A model of employment change between 2007 and 2010 in the absence of the recession was compared with actual employment change as measured by the Current Population Survey. Not surprisingly, results show that actual employment was lower than the model predicted for all age groups; however, differences were much larger for younger workers. Full-time employment was much lower than the model predicted, while part-time employment was much higher. Actual employment change varied widely among occupation and industry groups, but nearly all groups had employment that was lower than the model predicted.

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The widest differences between actual and model-predicted changes in full-time employment were among younger workers. Full-time employment of workers ages 19 to 33 were between 16 and 26 percentage points less than what the cohort model predicted in 2010. The largest difference was for workers ages 19 to 23, who had a difference of 26 percentage points between their actual and modeled levels of employment, consisting of a 24 percent decline in actual employment and lost potential growth of 2 percent. Offsetting these declines were larger increases in part-time employment among younger workers than the model predicted. For example, part-time employment was 16 percentage points higher than the model predicted for workers ages 19 to 23 and 23 percentage points higher for workers ages 24 to 28, the largest difference for any age group. Though large, these gains in part-time employment for workers ages 19 to 33 were not enough to overcome the declines in full-time employment, which led to declines in total employment that were 11 to 13 percentage points larger than the model predicted.

Differences between actual and model-predicted changes in full-time employment were not as dramatic for older age groups as for younger age groups, although the directions of these changes were the same. For example, employment of full-time workers ages 34 to 64 years of age was between 8 and 12 percentage points less than the model predicted in 2010, compared with a range of 17 to 26 percentage points less for workers ages 19 to 33. However, the differences between actual and model-predicted changes in part-time employment show no discernable pattern based on age, with employment of all age groups higher than the model predicted in 2010 (see figure 4).

Chosen excerpts by Job Market Monitor. Read the whole story at  A cohort component analysis of the 2007–2009 recession : Monthly Labor Review : U.S. Bureau of Labor Statistics.

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