Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/214943 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7941
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
U3, the official unemployment rate, is an inadequate gauge of labor-market slack and the extent to which it misinforms varies substantially over the business cycle. The U6 unemployment rate is usually about 4 percentage points above U3. However, during the Great Recession it exceeded U3 by 7 percentage points for three years. Moreover, the U6-U3 gap is magnified among disadvantaged groups such as minorities, youth, and for the less educated. For instance, in January 2011 the U6-U3 gap among African American youth was 17.9 pps as U6 climbed to 47.5% and was similarly large among African Americans without a high-school diploma.
Subjects: 
unemployment
U6
unemployment by ethnicity
discouraged workers
labor market slack
JEL: 
J40
J49
J69
Document Type: 
Working Paper
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