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The Persistent Labour-Market Effects of the Financial Crisis

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  • Österholm, Pär

    (National Institute of Economic Research)

  • Mossfeldt, Marcus

    (National Institute of Economic Research)

Abstract

This paper estimates the effects of the financial crisis on the Swedish labour market. Using an unobserved components model and an external forecast, we estimate a future path for the NAIRU. Judging by this analysis, the labour market will be in equilibrium again in 2013. Linking the NAIRU to other labour-market variables through an estimated vector error correction model and population projections, it is found that this new equilibrium is associated with a smaller equilibrium labour force and lower equilibrium employment.

Suggested Citation

  • Österholm, Pär & Mossfeldt, Marcus, 2010. "The Persistent Labour-Market Effects of the Financial Crisis," Working Papers 117, National Institute of Economic Research.
    • Handle: RePEc:hhs:nierwp:0117
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    More about this item

    Keywords

    Discouraged worker; Unobserved components; Cointegration;
    All these keywords.

    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

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