The Rising Strength of Management, High Unemployment and Slow Growth: Revisiting Okunâ€™s Law
AbstractWhy is economic growth so slow and why are we having jobless recoveries? I address these questions here by revisiting Okunâ€™s Law, focusing not just on its cyclical component but also upon its implied estimates of trend growth. Some observers argue that the rising strength of management (falling strength of labor) since the 1980s has led to a more volatile labor market and therefore to the decay of Okunâ€™s Law. Using cross-state data since 1964 I examine whether Okunâ€™s Law has changed in response to the decline of unionism. I find that the cyclical component of Okunâ€™s Law does not need revision and that the trend growth component has declined moderately.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt8sc8s1z1.
Date of creation: 26 Nov 2012
Date of revision:
Social and Behavioral Sciences; High Unemployment; Slow Growth; Okun's Law;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-10 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edward S. Knotek & II, 2007. "How useful is Okun's law?," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 73-103.
- Samuel Bentolila & Pierre Cahuc & Juan J. Dolado & Thomas Le Barbanchon, 2010.
"Two-Tier Labor Markets In The Great Recession: France Vs. Spain,"
- Bentolila, Samuel & Cahuc, Pierre & Dolado, Juan J. & Le Barbanchon, Thomas, 2010. "Two-Tier Labor Markets in the Great Recession: France vs. Spain," CEPR Discussion Papers 8152, C.E.P.R. Discussion Papers.
- Samuel Bentolila & Pierre Cahuc & Juan Jose Dolado & Thomas Le Barbanchon, 2010. "Two-Tier Labor Markets in the Great Recession: France vs. Spain," CESifo Working Paper Series 3269, CESifo Group Munich.
- Bentolila, Samuel & Cahuc, Pierre & Dolado, Juan J. & Le Barbanchon, Thomas, 2010. "Two-Tier Labor Markets in the Great Recession: France vs. Spain," IZA Discussion Papers 5340, Institute for the Study of Labor (IZA).
- Katharine G. Abraham & James L. Medoff, 1984. "Length of service and layoffs in union and nonunion work groups," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(1), pages 87-97, October.
- Katharine G. Abraham & Henry S. Farber, 1988.
"Returns to seniority in union and nonunion jobs: A new look at the evidence,"
Industrial and Labor Relations Review,
ILR Review, Cornell University, ILR School, vol. 42(1), pages 3-19, October.
- Katharine G. Abraham & Henry S. Farber, 1987. "Returns to Seniority in Union and Nonunion Jobs: A New Look at the Evidence," NBER Working Papers 2368, National Bureau of Economic Research, Inc.
- Katharine G. Abraham & Susan N. Houseman, 1995.
"Labor Adjustment under Different Institutional Structures: A Case Study of Germany and the United States,"
Book chapters authored by Upjohn Institute researchers,
in: Friedrich Buttler & Wolfgang Franz & Ronald Schettkat & David Soskice (ed.), Institutional Frameworks and Labor Market Performance: Comparative Views on the U.S. and German Economies, pages 285-315
W.E. Upjohn Institute for Employment Research.
- Susan N. Houseman & Katharine G. Abraham, 1994. "Labor Adjustment Under Different Institutional Structures: A Case Study of Germany and the United States," Upjohn Working Papers and Journal Articles 94-26, W.E. Upjohn Institute for Employment Research.
- Susan N. Houseman & Katharine G. Abraham, 1993. "Labor Adjustment Under Different Institutional Structures: A Case Study of Germany and The United States," NBER Working Papers 4548, National Bureau of Economic Research, Inc.
- Weisskopf, Thomas E, 1979. "Marxian Crisis Theory and the Rate of Profit in the Postwar U.S. Economy," Cambridge Journal of Economics, Oxford University Press, vol. 3(4), pages 341-78, December.
- Reich, Michael, 2012. "Unemployment after the Great Recession: Why so High? What Can We Do?/El desempleo después de la Gran Recesión: ¿Por qué tan alto? ¿Qué podemos hacer?," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 11-28, Abril.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff).
If references are entirely missing, you can add them using this form.