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Testing for hysteresis in unemployment in OECD countries. New evidence using stationarity panel tests with breaks

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  • Mariam Camarero
  • Josep Lluis Carrion Silvestre
  • Cecilio Tamarit

    (Universitat de Barcelona)

Abstract

This paper tests hysteresis effects in unemployment using panel data for 19 OECD countries covering the period 1956-2001. The tests exploit the cross-section variations of the series, and additionally, allow for a different number of endogenous breakpoints in the unemployment series. The critical values are simulated based on our specic panel sizes and time periods. The ndings stress the importance of accounting for exogenous shocks in the series and give support to the natural-rate hypothesis of unemployment for the majority of the countries analyzed.

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Bibliographic Info

Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 119.

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Length: 30 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:bar:bedcje:2004119

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es
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  12. Miguel A. León-Ledesma, 2000. "Unemployment Hysteresis in the US and the EU: a Panel Data Approach," Studies in Economics 0006, Department of Economics, University of Kent.
  13. Ewing, Bradley T. & Wunnava, Phanindra V., 2001. "Unit roots and structural breaks in North American unemployment rates," The North American Journal of Economics and Finance, Elsevier, vol. 12(3), pages 273-282, November.
  14. Brunello, G., 1989. "Hysteresis And The Japanese Unemployment Problem: A Preliminary Investigation," Papers 330, London School of Economics - Centre for Labour Economics.
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