Industrial Insight

Housing and debt…. | September 16, 2011

http://economics21.org/blog/household-debt-or-structural-change

Household Debt or Structural Change?

e21 Team | September 8, 2011

Both explanations – household debt and construction employment – place the housing boom as central to explaining why employment has lagged during the recession. However, the housing debt story suggests the possibility of easy fixes to employment by reducing aggregate debt levels. The construction employment story, on the other hand, paints a more difficult picture: employment may have lagged during the recession simply due to the difficulty of retraining residential construction workers for new fields. Figuring out which story better matches the facts is important for figuring out the scope for policies to deal with the unemployment problem.

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