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Essentially, the differences between employment growth rates during the 1980’s and 1990’s were due to hidden unemployment and the decline in rates of employment growth due to structural changes e.g. permanent downsizing. The reason why slower employment growth did not actually manifest itself into higher rates of unemployment in the 1990’s, is that growth in labour force participation rate (number of people who are looking for work) declined alongside employment growth. In other words, not only were there less employment opportunities but there were also less people actively seeking work...
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