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Unemployment And Labor Force Participation: A Panel Cointegration Analysis For European Countries

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  • Ozerkek, Y.
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    Abstract

    This paper investigates the long-run relationship between unemployment and labor force participation and analyzes the existence of added/discouraged worker effect, which has potential impact on economic growth and development. Using panel cointegration techniques for a panel of European countries (1983-2009), the empirical results show that this long-term relation exists for only females and there is discouraged worker effect for them. Thus, female unemployment is undercount.

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    Bibliographic Info

    Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

    Volume (Year): 13 (2013)
    Issue (Month): 1 ()
    Pages: 67-76

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    Handle: RePEc:eaa:aeinde:v:13:y:2013:i:1_6

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    Related research

    Keywords: labor-force participation rate; unemployment rate; discouraged worker effect; panel cointegration; economic development.;

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    References

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    1. Murphy, Kevin M & Topel, Robert H, 1997. "Unemployment and Nonemployment," American Economic Review, American Economic Association, vol. 87(2), pages 295-300, May.
    2. Aysit Tansel, 2001. "Economic Development and Female Labor Force Participation in Turkey: Time-Series Evidence and Cross-Province Estimates," ERC Working Papers 0105, ERC - Economic Research Center, Middle East Technical University, revised May 2001.
    3. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    4. Gustavsson, Magnus & Osterholm, Par, 2006. "The informational value of unemployment statistics: A note on the time series properties of participation rates," Economics Letters, Elsevier, vol. 92(3), pages 428-433, September.
    5. Jacob Mincer, 1962. "Labor Force Participation of Married Women: A Study of Labor Supply," NBER Chapters, in: Aspects of Labor Economics, pages 63-106 National Bureau of Economic Research, Inc.
    6. Stuart O. Schweitzer & Ralph E. Smith, 1974. "The persistence of the discouraged worker effect," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 27(2), pages 249-260, January.
    7. Österholm, Pär, 2010. "Unemployment and labour-force participation in Sweden," Economics Letters, Elsevier, vol. 106(3), pages 205-208, March.
    8. Emerson, Jamie, 2011. "Unemployment and labor force participation in the United States," Economics Letters, Elsevier, vol. 111(3), pages 203-206, June.
    9. Westerlund, Joakim, 2005. "Testing for Error Correction in Panel Data," Working Papers 2005:11, Lund University, Department of Economics.
    10. Westerlund, Joakim & Edgerton, David L., 2007. "A panel bootstrap cointegration test," Economics Letters, Elsevier, vol. 97(3), pages 185-190, December.
    11. Kristin Mammen & Christina Paxson, 2000. "Women's Work and Economic Development," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 141-164, Fall.
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