Unemployment and inactivity in the 2008-2009 recession

Abstract

This article looks at the pattern of worklessness, that is unemployment and inactivity, in the latest recession. Compared to previous recessions, the rise in unemployment has been small relative to the fall in Gross Domestic Product. Likewise, numbers receiving workless benefits other than for unemployment are not rising, in contrast to the two previous economic downturns. This suggests that labour market policies introduced since 1996 have, so far, been effective. However, the ability for new policies to withstand a rise in long-term unemployed is yet to be tested.