The Great Recession and State Unemployment Trends

Abstract

The recession that began in January 2008 was the deepest business downturn since the Great Depression of the 1930s. This recession has been referred to as The Great Recession due to its severity and the length of its duration. As the U.S. economy has experienced a shift in its industrial structure toward an ever-larger service sector, there is a literature that argues that economic fluctuations should be less than was the case in a goods-production dominated economy, as it is presumed that the demand for services is less cyclical than the demand for goods. The Great Recession challenges this presumption. This article reports on the unemployment experience of states through the Great Recession with regard to their industrial structure, finding that there is a correlation between industrial structure and unemployment trends.