The Great Recession left a deep mark on the American economy, most notably on the labor market. While this market is recovering, progress is very slow and many Americans remain in search of a job. Furthermore, current labor market trends are highly unexpected, leaving many economists looking for a definitive explanation. Mihai Dohotaru ’13, a recipient of a Summer Levitt Research Fellowship Grant, will work toward the answer with Professor of Economics Christophre Georges over the course of his project “The Housing Bubble and the U.S. Labor Market after the ‘Great Recession.’”
Dohotaru, an economics and mathematics double major, explains, “The ultimate goal of the project is to identify the major causes for the current deterioration in the US labor market and come up with realistic policy programs that could be implemented to alleviate the issue.” To do so, he will use a variety of scholarly articles and statistics, as well as econometric and mathematical tools.
His research begins with an investigation of why this recession is unique and why the labor market is recovering differently now than it has after other recessions. Next, Dohotaru is looking at conflicting hypotheses that aim to explain this anomaly, and then examining the housing bubble in particular and how it contributed to the weakened labor market. In addition to reading published work on the issue, Dohotaru will employ information from data sources such as JOLTS, Job Openings and Labor Turnover Survey, provided by the Bureau of Labor Statistics.
After this stage of his research is completed, Dohotaru will conduct hypothesis testing and basic econometric analysis to find a possible explanation for the labor market’s behavior, and finally he will write a paper on policy advice for moving forward with this market’s recovery.
October 2009 saw the recession’s highest unemployment rate at 10.1 percent, according to the Bureau of Labor Statistics. Since then, the labor market has been improving at an excruciatingly slow pace and full recovery remains a distant goal. Not only does the nation still face high employment, but long-term unemployment, defined as unemployment lasting six months or longer, is at an all-time high. High unemployment hinders economic growth, but more importantly it has a severe, negative and immediate impact on millions of American lives.
Economists have been highly concerned with these towering and persistent unemployment rates. In fact, current labor market trends deviate significantly from what conventional economics would predict. While dozens of academic articles have been written on U.S. unemployment as a result of the Great Recession, it remains exceedingly difficult to find a cogent, full explanation for the labor market’s behavior. Dohotaru will challenge this lack of conclusive literature with his research.
Dohotaru has been following U.S. labor market trends for some time, and he looks forward to working closely with these articles and data on an independent project. Despite the uncertainty that the labor market faces, Dohotaru’s research aims to synthesize a clear, comprehensive analysis of the U.S. labor market and suggest a possible policy plan for moving forward with this market’s recovery.
Dohotaru is a graduate of Colegiul German Goethe in Bucharest, Romania.