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Unemployment in the OECD: Models and Mysteries

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  • Junankar, Pramod N. (Raja)

    ()
    (University of New South Wales)

  • Madsen, Jakob B.

    ()
    (University of Copenhagen)

Abstract

This paper compares models used to explain OECD unemployment. The models suggest that the "natural rate of unemployment" has been driven up mainly by wage push factors. Panel data on twenty-two OECD countries are used to investigate the explanatory power of these models over the past two decades. Our estimates reveal that coefficients on key variables often turn out with signs which are at odds with the theories or are insignificant and that a second order autoregressive model performs nearly as well as all the other models. The conclusion offers some directions for future research.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1168.

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Length: 44 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1168

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Keywords: supply shocks; natural rate; unemployment; hysteresis;

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Cited by:
  1. Cowgill, Matt, 2013. "A Shrinking Slice of the Pie: The Labour Income Share in Australia," MPRA Paper 46209, University Library of Munich, Germany.
  2. Belot, M.V.K. & Ours, J.C. van, 2000. "Does the Recent Success of some OECD Countries in Lowering their Unemployment Rates lie in the Clever Design of their Labour Market Reforms?," Discussion Paper, Tilburg University, Center for Economic Research 2000-40, Tilburg University, Center for Economic Research.
  3. Junankar, Pramod N. (Raja), 2011. "The Global Economic Crisis: Long-Term Unemployment in the OECD," IZA Discussion Papers 6057, Institute for the Study of Labor (IZA).
  4. Andrew S. Downes, 1998. "An Economic Analysis of Unemployment in Trinidad and Tobago," Research Department Publications 4134, Inter-American Development Bank, Research Department.
  5. Nir Klein, 2012. "Real Wage, Labor Productivity, and Employment Trends in South Africa," IMF Working Papers 12/92, International Monetary Fund.
  6. Elgin, Ceyhun & Kuzubas, Tolga Umut, 2013. "Wage-productivity gap in OECD economies," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 7(21), pages 1-21.
  7. Andrew S. Downes, 1998. "Un análisis económico del desempleo en Trinidad y Tobago," Research Department Publications 4135, Inter-American Development Bank, Research Department.

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