Jobless Growth

Introduction
During the last few recessions experienced in the USA a new phenomenon has puzzled many economists titled ‘Jobless growth’.
The term jobless growth refers to a situation when a country is emerging from a recession, where its gross domestic product increases but the unemployment rate stays the same or lags behind for several quarters without increasing following GDP growth.
Jobless growth in the USA has alarmed many, the reason being that over the past few major recessions of 1991, 2001 and 2008, all recoveries were jobless. This is a contrast to previous recoveries in the USA, as since 1945-1990 economic recoveries in the USA led to rapid employment increases.
In 1991-1992 recovery , output rose fairly steadily, but job growth remained near zero, for more than a year, similarly in the recovery of 2001-1003, GDP had grown each quarter at annualized rates between 1.3 and 5.0 percent, while payroll growth averaged -0.4 percent at an annualized rate through July. In the last recovery of 2008 till now, jobless growth occurred once again at an alarming rate, the unemployment rate at the end of 2009 measured 9.6% a year into the recovery.
This phenomenon has also been of an interest to me and I aim in my final project to investigate the causes of the jobless recoveries in the USA especially in the recoveries of 2001 and 2008, as they have had devastating consequences on unemployment and its growth.

Motivation and Aims
As an economics student, macroeconomic issues such as unemployment are of great interest to me as they give insight on lessons to be learnt in regards to advocating the right policies to maintain appropriate unemployment levels during dampening recessions such as the one experienced in 2008.
In examining factors for the jobless growth of the USA it will also be useful to examine the experiences of other OECD countries’ unemployment trends over a similar period.
The Two OECD countries of most interest are Canada and France. Being USA’s neighbouring country it is very likely that Canada will follow similar trends in unemployment to USA, also because of open trade between these two countries, factors that affect their unemployment is also likely to be similar.

There are many factors that could have contributed to jobless growth in USA and the unemployment trades in France and Canada. The first factor or econometrically speaking variable that I will be measuring is the rate of technological change in all three countries and the effect it has on the unemployment rate. According to the article ‘Fictional unemployment as a heavy cost of technological progress’ by the authors William Baumol and Edward Nathan Wolf, where the article examined the causal effects of the rate of technological progress on the frictional rate of unemployment and therefore the natural rate of unemployment in the long term it was concluded that technological progress has a positive effect on the unemployment rate in the long term therefore unemployment rose and prolonged with an emerging rate of technological progress.