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The nature of occupational unemployment rates in the United States: hysteresis or structural?

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  • B. Candelon
  • A. Dupuy
  • L. Gil-Alana

Abstract

This article provides new evidence on the nature of occupational differences in unemployment dynamics, which is relevant for the debate between the structural or hysteresis hypotheses. We develop a procedure that permits us to test for the presence of a structural break at unknown date. Our approach allows the investigation of a broader range of persistence than the 0/1 paradigm about the order of integration, usually implemented for testing the hypothesis of hysteresis in occupational unemployment. In almost all occupations, we find support for both the structuralist and the hysteresis hypotheses, but stress the importance of estimating the degree of persistence of seasonal shocks along with the degree of long-run persistence on raw data without applying seasonal filters. Indeed hysteresis appears to be underestimated when data are initially adjusted using traditional seasonal filters.

Suggested Citation

  • B. Candelon & A. Dupuy & L. Gil-Alana, 2009. "The nature of occupational unemployment rates in the United States: hysteresis or structural?," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2483-2493.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:19:p:2483-2493
    DOI: 10.1080/00036840802584950
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    Cited by:

    1. Alina Sorgner & Michael Fritsch, 2018. "Entrepreneurial career paths: occupational context and the propensity to become self-employed," Small Business Economics, Springer, vol. 51(1), pages 129-152, June.
    2. Alina Sorgner & Michael Fritsch, 2013. "Occupational Choice and Self-Employment - Are They Related?," Jena Economics Research Papers 2013-001, Friedrich-Schiller-University Jena.
    3. Sorgner, Alina & Fritsch, Michael, 2018. "Entrepreneurial Career Paths: Occupational Environments and the Propensity to Become Self-Employed," Open Access Publications from Kiel Institute for the World Economy 234990, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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