Why Has the Natural Rate of Unemployment Increased Over Time?

52 Pages Posted: 3 Jan 2002

See all articles by Chinhui Juhn

Chinhui Juhn

University of Houston - Department of Economics; IZA Institute of Labor Economics

Kevin M. Murphy

University of Chicago; National Bureau of Economic Research (NBER)

Robert H. Topel

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: February 1992

Abstract

In 1970, when Robert Hall asked, "Why Is the Unemployment Rate So High at Full Employment?" the unemployment rate for adult men stood at 3.5 percent. That rate, which had been substantially below that level throughout the late 1960s, would climb to 4.4 percent in the recession of 1971. More recently, after the longest economic expansion of the post-war period, the unemployment rate of prime-aged men in the late 1980s settled at just below 5 percent of the labor force. What changes in the American labor market led to this apparent secular increase in the natural rate of unemployment. Twenty years later, we revisit Hall's question and turn up some new answers.

Suggested Citation

Juhn, Chinhui and Murphy, Kevin M. and Topel, Robert H., Why Has the Natural Rate of Unemployment Increased Over Time? (February 1992). NBER Working Paper No. R1694. Available at SSRN: https://ssrn.com/abstract=251262

Chinhui Juhn (Contact Author)

University of Houston - Department of Economics ( email )

Houston, TX 77204-5882
United States
713-743-3823 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Kevin M. Murphy

University of Chicago ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7280 (Phone)
773-702-2699 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert H. Topel

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7524 (Phone)
773-702-2699 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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