2010 University of Michigan Poverty Research Grants
Michael W. L. Elsby, University of Michigan, David Ratner, University of Michigan, and Matthew D. Shapiro, University of Michigan and NBER
The Polarization of Employment in the United States
Since the 1970s, rates of joblessness among men have been on the rise. This research will deepen our understanding of that dramatic increase. This project addresses two issues: (1) the increased joblessness driven by long nonemployment spells and (2) the question of means of support for these checked-out workers as there are relatively limited social insurance mechanisms in the United States. Using the Panel Study of Income Dynamics (PSID) beginning in 1968, we explore the detailed income data, consumption data and savings data. By deconstructing the sources of income of a low-skilled workforce, we will better understand the sources of their relatively elastic labor supply (i.e. if individuals face destitution when unemployed, one would expect them to accept jobs at very low wages).This research has significant policy implications as it will explore the extent to which transfer incomes allow workers to sustain prolonged periods of unemployment.