Losing a Job During a Recession

Each year, even when the economy is growing, millions of people lose a job for reasons other than poor performance or misconduct. The ability of employers to quickly adjust the size of their workforces in response to changes in demand is generally considered a source of strength for the U.S. economy over the long term, because it prompts a shift of labor resources toward areas of higher productivity. Some people, however, bear substantial costs from employers’ flexibility—particularly during recessions, when many people lose jobs and new opportunities are relatively scarce. This issue brief