The Unassuming Economist

In an article for the Atlantic, Frederick Hess of the American Enterprise Institute links the problem of structural unemployment with the lack of quality job training/workforce development. He writes “economist Prakash Loungani of the International Monetary Fund has estimated that 25 percent of the unemployed are out of work today due to skill-job mismatches. Georgetown’s Harry Holzer has calculated that today’s unemployment rate of 9.1 percent would be nearer to 8 percent if a majority of these jobs were filled (…) Fact is, America’s community colleges, job training, and workforce development are a mess. Community colleges suck up nearly $36 billion in taxpayer subsidies to provide training of uncertain quality, retain a balky and inconvenient academic calendar, and frequently do a lousy job of linking their instruction to local workforce needs (…) it can be hard for workers seeking retraining to find convenient, cost-effective, high-quality options (..) Absent high-quality retraining, it’s easy for workers in dying industries to get stuck, for their skills to atrophy, and for their networks and work habits to erode.”

In an article on structural unemployment, Robert Samuelson writes that “one puzzle of this somber economy is the existence of unfilled jobs in the midst of mass unemployment. You might think (I did) that with almost 14 million Americans unemployed — and nearly half those for more than six months — companies could fill almost any opening quickly. Not so. Somehow, there’s a mismatch between idle workers and open jobs. Economist Prakash Loungani of the IMF estimates that 25% of unemployment is structural; that’s more than 3 million jobs.” Read the full article at the Washington Post.

Akerlof says the topic that has motivated him the most over his 40-year career is unemployment. “I have always thought of unemployment as a terrible thing. In fact that has been the motivation for almost everything I have ever written. A person without a job loses not just his income but often the sense that he is fulfilling the duties expected of him as a human being.” Moreover, he says it has long been his “dream” to have a macroeconomics grounded in the “full range of human emotions and actions: fairness, confidence, greed, identity, procrastination.” To continue reading check the F&D profile.

Also, thanks to Greg Mankiw and Menzie Chinn who featured the profile on their sites.

The Economic Times (India) summarizes my recent work on Information Rigidity in Growth Forecasts: Some Cross-Country Evidence (joint with Herman Stekler and Natalia Tamirisa).

The Woodrow Wilson International Center for Scholars hosted a forum to give a grade to the U.S. policy response to the financial crisis. My presentation was on the unemployment crisis.