Labor Market Trends and Outcomes: What Has Changed since the Great Recession?

33 Pages Posted: 22 Mar 2021

See all articles by Erica Groshen

Erica Groshen

Cornell University

Harry J. Holzer

Georgetown University - Public Policy Institute (GPPI); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: March 19, 2021

Abstract

We describe trends in wages and labor force participation for the “working class”—whom we define as workers with high school or less education—compared to those with college or more. We compare cyclical peaks over the entire period 1979–2019, with particular focus on the Great Recession (2007–2010) and recovery (2010–2019). We also present results by gender and race. We find real wage growth in the latter period for all workers, but not enough to change the long-term trends of growing inequality and stagnant wages for the less-educated; and we also find that labor force participation continued to decline for the less-educated, even during the recovery. Gaps between whites and blacks also grew, while Hispanics and Asians made more progress. We consider various explanations of these findings and show that the early effects of the 2020‒2021 pandemic recession hurt less-educated workers and those of color more than anyone else.

Keywords: Wages, participation, working class, Great Recession

JEL Classification: J15, J16, J31

Suggested Citation

Groshen, Erica and Holzer, Harry J., Labor Market Trends and Outcomes: What Has Changed since the Great Recession? (March 19, 2021). Available at SSRN: https://ssrn.com/abstract=3809729 or http://dx.doi.org/10.2139/ssrn.3809729

Erica Groshen (Contact Author)

Cornell University

Ithaca, NY 14853
United States

Harry J. Holzer

Georgetown University - Public Policy Institute (GPPI) ( email )

3600 N Street, NW Suite 200
Washington, DC 20057
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

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

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