Research desk investigates: Was the housing boom responsible for employment growth?
By Dylan Matthews
The theory is this: When you take out the added employment from the construction and real estate boom of the 2000s, we actually didn't add many jobs from the end of the dot-com crash. As a side effect, there was also increased spending and employment in the homeland security sector.
Is there any way to break out the "extra" jobs in the construction, real estate and finance sectors (this would include increased employment at Home Depot, Lowes and similar stores) along with lingering U6 unemployment through the 2000s?
khadjair is right; employment grew markedly in the construction and finance sectors over that period. Here's how they changed from 1995 to 2009:
The dot-com crash happened around 2000, and the mortgage crash in 2008, and you can see the effects of both on the graph. However, a look at non-housing related employment reveals that job growth and subsequent losses in other sector occurred too, and in roughly the same pattern. Here's a look at how total and non-housing related employment changed over the same period:
The two track each other very closely, suggesting that housing-related employment wasn't that much of an outlier. Of course, the housing bubble had a broader effect on job growth than merely stimulating the financial and construction sectors, so khadjair's comparison does not give a complete picture. But this does suggest that the unemployment caused by the downturn, and the growth caused by the bubble, affected more than those directly involved in selling the asset the bubble was centered on.
Posted by: fredbrack | July 22, 2010 6:08 PM | Report abuse
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