The long-term unemployed normally have a higher rate of labor force
withdrawal than the short-term unemployed, although we document that
following a recession the labor force withdrawal rates for all duration groups
tend to collapse to a common, lower level. Nearly a fifth ofthe cyclical movement
in the labor force attachment of the long-term unemployed appears
to be related to shifts in the observed characteristics of the unemployed
over the business cycle. The cyclical behavior of labor force withdrawal
is also consistent with the expiration of extended unemployment insurance
benefits leading the long-term unemployed to exit the labor force.
The countercyclical pattern of labor force participation of the long-term
unemployed suggests that a critical channel for the future path of long-term
unemployment in the United States involves the evolution of labor force
withdrawal rates by duration of unemployment.