“…The reason for the low employment-output relation was that firms undertook massive work-sharing to limit the spread of joblessness. According to Neumann, Taylor, and Fishback (2013), “between 50 and 90 percent of declines in labor input were accommodated by falling hours” in the depression, in part because the federal government encouraged firms to reduce hours instead of jobs. 12 By contrast, between 2007 and 2009, output declined by 4.7 percent (six quarters into the recession) while employment fell by 6.3 percent (nine quarters into the recession) for an employment to output elasticity of 1.34—over twice the employment-output elasticity in the Great Depression.…”