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March 27, 2013

'Is Job Polarization Holding Back the Labor Market?'

Stefania Albanesi, Victoria Gregory, Christina Patterson, and Ayşegül Şahin of the NY Fed ask:
Is Job Polarization Holding Back the Labor Market?
Their answer:
Our findings show that while job polarization is an important ongoing trend in the labor market, it’s not a key contributor to the sluggish labor market recovery. Our analysis suggests that the weakness in the labor market is broad based and not limited to a certain segment of the market.
They find that the slow recovery is NOT due to pre-existing, "ongoing trends in the labor market that were exacerbated during the recession," i.e. (consistent with most evidence on this), it's a cyclical, lack of demand problem not a structural problem.

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