Academic Literature

Social Safety Net in US – It has not led disrupted local economies to recover

Our research indicates that recessions produce enduring economic disruptions to local economies, and this pattern has existed for at least the past five decades. Consequently, recessions likely play a role in the shift of economic activity across places over time; this, in turn, has implications for economic opportunity for people who grow up in areas badly hit— especially repeatedly —by recessions.

The social safety net meant to deal with cyclical, temporary labor market disruption— unemployment insurance, SNAP (food stamps), and one-time cash grants— has not, in the past, led areas to recover. Instead, public policy may need to come up with more extensive and longer-term programs to help workers improve their skills, help businesses retool, and, more broadly, help communities reinvest in economic development.

HIGHLIGHTS

  • We study the impacts of each recession over the past 50 years on the economic health of metro areas.
  • Areas that suffer larger employment losses during a recession never fully recover their employment relative to less-affected areas.
  • Badly hit areas also have less population growth, and the share of the population that is employed, as well as per capita income, are lower for at least a decade.
  • These areas also grow relatively older and often become less educated, with fewer management and professional jobs.
  • Recessions play a role in some areas falling economically behind others, as employment opportunities shift across areas more quickly than people do.

Strengthening Workforce Data Is Critical

To address such rampant unemployment, policymakers require more powerful and more robust employment data systems than currently exist. In my role as a professor and researcher at the Ohio State University, I worked with
to build a longitudinal data system linking information from education, workforce development, and social services. The linked data have allowed researchers in government and academia to study the impact of individual outcomes for public policies, such as employment or education.

I recommend four specifc steps:

1) Increase the use of administrative records in employment statistics.
2) Better fund workforce data system infrastructure.
3) Explore partnerships with private organizations that have signifcant data on the labor force.
4) Build on the partnerships between universities and states to make use of these data, especially to focus attention on inequalities in the labor market.

Chosen excerpts by Job Market Monitor. Read the whole story @ The Enduring Local Harm from Recessions and Workforce Data (and Knowledge) under Pressure

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