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Who Suffers During Recessions?
Original Article By: Hilary Hoynes and Douglas L. Miller and Jessamyn Schaller
The Journal of Economic Perspectives (Summer 2012) vol 26 no 3
Major Topic: Economics
Minor Topic: Sociology


         A reduction of wealth is normal and expected during a recession, however the degree to which various classes and sub-groups of workers experience the loss is very different.

         The authors compare the five recessions between 1979 and 2009 and determine 1) that the Great Recession of 2007 to 2009 was in fact deeper and longer than all the others; 2) that the detrimental effects of the Great Recession are suffered disproportionally more by men, ethnic minorities, youth and the less educated; 3) that the detrimental effects borne by the relative groups have been relatively constant over the five recessions; and 4) that the small differences that have occurred in the Great Recession can be explained by the various groups' relative participation in cyclical sensitive industries.

         The fact that some groups are more sensitive to the adverse effects of the business cycle means that even with a small movement in a general category (such as employment) most of the change will be borne by the sensitive group. For example in the category of education, a group with low levels of education is more sensitive to the negative effects of the business cycle than a higher educated group. When we see movement in the unemployment rate, the greatest percentage of people effected will be in the more sensitive group.

         For the most part the sensitive groups have remained constant between the start and end of the study, however woman's sensitivity has reduced over the time frame. The authors explain this as being due to gender labour preferences. Women seem to prefer industries that are less susceptible to the business cycle.

         In conclusion the Great Recession is nearly identical in kind to the other recession of the last 30 years; the only difference is in the degree of hardship cause in terms of scope and time duration.

Added on: 2012-10-07 21:59:30
Précis by: James Jeff McLaren
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