The model explains the large and highly persistent response in wages and employment known as the “unemployment scar”.
The key driver of the long term losses is the original loss of job security and its interaction with the evolution of human capital.
For instance in the United Kingdom, the average rate of unemployment for the entire period was about 1.8% of the labor force and in worst years it did not even exceed 2.5%.
The main driving force was autonomous rather than policy related.
Considered as a very hot issue to debate these days is youth unemployment- where people finish their degrees and then just end up not having the kind of job they deserve due to tough competition in the market.