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Sectoral Shifts and Cyclical Unemployment

Lilien, David M.·1982·Journal of Political Economy

Abstract

A substantial fraction of cyclical unemployment is better characterized as fluctuations of the "frictional" or "natural" rate than as deviations from some relatively stable natural rate. Shifts of employment demand between sectors of the economy necessitate continuous labor reallocation. Since it takes time for workers to find new jobs, some unemployment is unavoidable. This paper presents evidence that most of the unemployment fluctuations of the seventies (unlike those in the sixties) were induced by unusual structural shifts within the U.S. economy. Simple time-series models of layoffs and unemployment are constructed that include a measure of structural shifts within the labor market. These models are estimated and a derived natural rate series is constructed.

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Metadata

Authors
Lilien, D. M.
Venue
Journal of Political Economy
Published
1982-08
Volume
90
Issue
4
Pages
777-793
ISSN
  • 0022-3808 (ISSN-L)
  • 1537-534X
OpenAlex
W2091206152
Cited by
1,120
References
5
FWCI
39.15
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Sectoral Shifts and Cyclical Unemployment. https://app.cochat.ai/papers/10.1086/261088
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Lilien, D. M. (1982). Sectoral Shifts and Cyclical Unemployment. Journal of Political Economy. https://doi.org/10.1086/261088

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