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- Title
A Reduced-form Equation for the Unemployment Rate Estimated from a Panel of Nineteen OECD Countries.
- Authors
HATZINIKOLAOU, DIMITRIS; GIRTZIMANI, KONSTANTINA; MOUSAFIRIS, CHRISTOS
- Abstract
Using a dynamic fixed-effects model for a panel of nineteen OECD countries and annual aggregate data, 1970-2008, we estimate a reduced-form equation for the observed unemployment rate. We find that wage-push factors, such as employment protection and union power, increase the unemployment rate, whereas net immigration reduces it, although this last effect is practically negligible. We also find that the labour market is characterised by strong "lagged adjustment processes," so the governments of the countries in the sample have an additional incentive to fight current unemployment, to prevent it from becoming prolonged.
- Subjects
OECD countries; UNEMPLOYMENT statistics; JOB security; LABOR market; EMIGRATION &; immigration; TWENTY-first century; ECONOMIC history
- Publication
Economic & Social Review, 2015, Vol 46, Issue 3, p389
- ISSN
0012-9984
- Publication type
Article