I had hoped to have something intelligent to say about the above data, but instead, after an hour or two of staring at it and fooling around in Excel, I find myself still seriously puzzled. So I'm throwing the graph up in hopes someone else is smarter or better informed than me.
The data are from the BLS, and represent the seasonally adjusted monthly flows between three groups of men (age 16 and over): the employed, the officially unemployed, and the not-in-labor-force (eg retired, students, drug-dealers, disabled, house-husbands, artists-and-writers-in-attics, etc).
The gray bars are recessions.
If it helps any, here are the differences between each of the color groups above (ie the net flows between each of the three groups). I've taken a seven month centered moving average to mitigate the worst of the noise.
Some things I especially don't understand:
- Why does the flow from NIL->Unemployed go up in recessions (and the following jobless recoveries), almost as much as the flow from Unemployed->NIL? I can understand the second going up (discouraged workers), but there's actually little change in the net because the other way goes up as much.
- Why do movements of NIL->Employed and Employed->NIL track each other so closely? It would seem like the reasons why people would move in one direction (eg retiring) would have nothing to do with the reasons they move in the other (eg finished school). Why do the two move together so much?