Editing Recession (section)

==Consequences==

===Unemployment===

Unemployment is particularly high during a recession. Many economists working within the [[Neoclassical economics|neoclassical paradigm]] argue that there is a [[natural rate of unemployment]] which, when subtracted from the actual rate of unemployment, can be used to estimate the [[Output gap|GDP gap]] during a recession. In other words, unemployment never reaches 0%, so it is not a negative indicator of the health of an economy, unless it exceeds the "natural rate", in which case the excess corresponds directly to a loss in the GDP.<ref>[http://www.saylor.org/site/wp-content/uploads/2012/01/SAYLOR.ORG-ECON102-UNEMPLOYMENT-RATE.pdf  Unemployment Rate] {{Webarchive|url=https://web.archive.org/web/20120912143304/http://www.saylor.org/site/wp-content/uploads/2012/01/SAYLOR.ORG-ECON102-UNEMPLOYMENT-RATE.pdf |date=12 September 2012 }} p. 1. The Saylor Foundation. Retrieved 20 June 2012.</ref>

The full impact of a recession on employment may not be felt for several quarters. After recessions in Britain in the 1980s and 1990s, it took five years for unemployment to fall back to its original levels.<ref name="ESRC">{{cite web | url=http://www.esrc.ac.uk/ESRCInfoCentre/PO/releases/2009/september/recessionbritain.aspx | title=Recession Britain: New ESRC report on the impact of recession on people's jobs, businesses and daily lives | publisher=Economic and Social Research Council | date=17 September 2009 | access-date=22 January 2010 | last=Vaitilingam | first=Romesh | url-status=dead | archive-url=https://web.archive.org/web/20100102162049/https://www.esrc.ac.uk/ESRCInfoCentre/PO/releases/2009/september/recessionbritain.aspx | archive-date=2 January 2010 }}</ref> Employment discrimination claims rise during a recession.<ref>{{cite news|url=https://www.nytimes.com/2011/01/12/business/12bias.html?ref=business|title=More Workers Complain of Bias on the Job, a Trend Linked to Widespread Layoffs|work=The New York Times|first=Catherine|last=Rampell|date=11 January 2011|access-date=7 February 2017|archive-date=23 July 2016|archive-url=https://web.archive.org/web/20160723010843/http://www.nytimes.com/2011/01/12/business/12bias.html?ref=business|url-status=live}}</ref>

===Business===

[[Productivity]] tends to fall in the early stages of a recession, then rises again as weaker firms close. The variation in [[Profit (accounting)|profitability]] between firms rises sharply.{{citation needed|date=August 2022}} The fall in productivity could also be attributed to several macro-economic factors, such as the loss in productivity observed across the UK due to [[Brexit]], which may create a mini-recession in the region. [[Pandemic|Global epidemics]], such as [[Coronavirus disease 2019|COVID-19]], could be another example, since they disrupt the global supply chain or prevent the movement of goods, services, and people.

Recessions have also provided opportunities for [[anti-competitive]] [[merger]]s, with a negative impact on the wider economy; the suspension of [[competition policy]] in the United States in the 1930s may have extended the Great Depression.<ref name="ESRC" />

===Social effects===

The [[living standards]] of people dependent on wages and [[salaries]] are more affected by recessions than those who rely on [[fixed income]]s or [[welfare benefits]]. The loss of a job has a negative impact on the stability of families, and individuals' health and well-being.<ref name="ESRC"/>