The purpose of this study is to examine the macroeconomic effects of the recent business cycles on the U.S. labor market over the period of 1980-2014. The paper focuses on the labor market's slow recivery after the Great Recession of 2007-2009. Despite recent improvements, there is evidence of significant slacks in the labor market in the five years following the recent recession. The paper also investigates the effects of highly accommodative monetary and fiscal policies over the same same period. In addition to cyclical factor, the literature provides additional explanations, including structural factors, such as aging of the labor force, and changing dynamics of the U.S. labor market, following the increasing globalization of the economy. Using quarterly data, we apply a structural vector autoregressive (SVAR) model to study the dynamic interaction among eight variables (total employment, labor force participation, unemployment rate, real output growth, oil prices, inflation rate, ans well monetary and fiscal policy variables) for the period of study. The paper provides additional insight into the complexity of the interaction among these variables and provides some explanation for the slow labor recovery after the Great Recession.

Key words: Business cycles, employment and labor force participation

JEL Classification: E24, E52, E 62, J63