Temporary Layoffs during the Great Recession

Source: Erica L. Groshen, Federal Reserve Bank of New York, Liberty Street Economics, April 6, 2011

In this post, I show that despite the depth of the Great Recession, U.S. employers did not use temporary layoffs much to cut costs. Just as they did during the previous two recessions, when firms laid workers off, they usually severed ties completely. This prevalence of permanent layoffs during the recession could slow the employment rebound over the coming months. It also raises questions about why the behavior of employers during recessions has changed.

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