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Did the unemployment rates converge in the EU?

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  • László Kónya

    (University of Melbourne)

Abstract

This paper looks at unemployment rate convergence among the EU Member States. In particular, it examines whether the unemployment rate differences diminished between 1991 and 2014 among the old EU countries, among the new EU countries, among the euro countries and among the no-euro countries, and whether the new EU countries were converging in this sense to the group of old EU countries. Three alternative concepts of convergence are considered and tested for on each group of countries: σ-convergence, stochastic convergence and time-series β-convergence. The results provide strong support for EU unemployment rate convergence, although within each group there are large differences between the countries and during the recent economic downturn, there were clear signs of temporary divergence as well.

Suggested Citation

  • László Kónya, 2020. "Did the unemployment rates converge in the EU?," Empirical Economics, Springer, vol. 59(2), pages 627-657, August.
    • Handle: RePEc:spr:empeco:v:59:y:2020:i:2:d:10.1007_s00181-019-01678-5
    DOI: 10.1007/s00181-019-01678-5
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    More about this item

    Keywords

    European Union; Unemployment rate; Convergence; Structural break; Unit root;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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