Economic Report of the President

Chart 2-3Distribution of Unemployment by Race1978 1982NOTE.—DATA RELATE TO PERSONS 16 YEARS AND OVER.SOURCE: DEPARTMENT OF LABOR.is particularly sensitive, rising from 42 percent in 1978 to 59 percentin 1982. Over this period the number of job losers on temporarylayoff tripled and the number of permanent job losers more thandoubled. The decline in alternative employment opportunities resultedin a decline in the share of unemployment traceable to workersleaving their jobs voluntarily during the recession—from 14 percentin 1978 to 8 percent in 1982. Finally, because the number of laborforce entrants and reentrants is relatively constant, their share intotal unemployment declined somewhat during the recession.The data on reasons for unemployment indicate a major differencebetween cyclical and structural unemployment. Almost 90 percent ofthe increase in unemployment during cyclical downturns involves increasesin job losses and layoffs, as firms respond to declines indemand for their products. On the other hand, almost 60 percent ofstructural unemployment is comprised of voluntary job leavers, laborforce entrants, and reentrants. The remainder are job losers. As describedbelow, the very different causes of cyclical and structural unemploymentsuggest that different policy responses are appropriate.34