Buying Lower-Quality Goods in a Recession Contributes to Unemployment

Economy
Research Fact :
Buying Lower-Quality Goods in a Recession Contributes to Unemployment


During a recession, consumers trade down in the quality of the goods and services they buy — and because lower-quality products are generally LESS labor-intensive, this trading down reduces the demand for labor and increases unemployment.

 Researchers' calculations suggest -  that 22 to 36% (depending on the measure of quality used and the data set) of the decline in employment during the 2007–2012 period ( The U.S.& world over ) is accounted for by consumers trading down in the quality of the goods and services they bought.

Courtesy :   a study by Nir Jaimovich at the University of Southern California and Sergio Rebelo and Arlene Wong at Northwestern University.