Persistent unemployment after recessions and the policies required to bring it down are the subject of an ongoing debate. One view suggests there are fundamental changes in the labor market that imply a long-term higher rate of unemployment, requiring the implementation of structural policy...

We empirically analyze the effect of policy of the Federal Reserve on the US labor market using the PSID data set. We find that an increase in the federal funds rate decreases the probability that an individual is unemployed. Survival analysis indicates that a rise in the federal funds rate will...

Monetary policy is conventionally understood to influence labor demand, with little effect on labor supply. We estimate the response of labor market flows to high-frequency changes in interest rates around FOMC announcements and Fed Chair speeches and find that, in contrast to the consensus...