Economic Report of the President

Chart 2-4Distribution of Unemployment By Reason1978 1982NOTE.—DATA RELATE TO PERSONS 16 YEARS AND OVER.SOURCE: DEPARTMENT OF LABOR.THE DYNAMICS OF UNEMPLOYMENTAn essential feature of the unemployment problem is its dynamiccharacter. The appropriate design of policies to reduce unemploymentdepends on whether most of the unemployed are out of workfor a long time and must wait for an economic upturn to find jobs orwhether they are a group whose membership changes rapidly, evenduring recessions.The principal source of information on the duration of unemploymentis the monthly Current Population Survey, which asks personswho report themselves as unemployed to report how long they havebeen unemployed. Chart 2-5 presents information on the duration ofunemployment in 1978 and 1982. The clearest difference betweencyclical and structural unemployment emerges in the incidence oflong-term unemployment. In 1982 the number of unemployed individualswho reported that they had been out of work for 6 or moremonths was almost three times the corresponding number in 1978,when the economy was operating without significant cyclical unemployment.While the incidence of long-term unemployment increases sharplyduring recessions, it is important to recognize that many of the un-35