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What really drives unemployment? A bayesian approach to determine the impact of institutions on the unemployment rate

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  • Andreas Sachs

    () (Centre for European Economic Research)

Abstract

Labor and product market regulations affect the unemployment rate without a doubt. Econometricians, however, have yet to establish an unequivocal significance of this impact. The bayesian model averaging approach applied in this paper permits to unambiguously identify institutional indicators related to unemployment. For a panel of 17 countries, 24 years, and 19 institutional variables, eight indicators are identified as robust and significant determinants of unemployment, while the remaining eleven indicators are not related to the unemployment rate.

Suggested Citation

  • Andreas Sachs, 2012. "What really drives unemployment? A bayesian approach to determine the impact of institutions on the unemployment rate," Economics Bulletin, AccessEcon, vol. 32(1), pages 1008-1019.
  • Handle: RePEc:ebl:ecbull:eb-12-00144
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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I1-P96.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sachs Andreas & Smolny Werner, 2015. "Youth Unemployment in the OECD: The Role of Institutions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 403-417, August.
    2. repec:aka:aoecon:v:67:y:2017:i:3:p:333-357 is not listed on IDEAS
    3. repec:wfo:wstudy:59156 is not listed on IDEAS
    4. repec:wfo:wstudy:57884 is not listed on IDEAS
    5. Peter Huber, 2015. "What Institutions help immigrants Integrate?," WWWforEurope Working Papers series 77, WWWforEurope.

    More about this item

    Keywords

    Unemployment; Labor Market Institutions; Product Market Institutions; Bayesian Model Averaging; Model Averaging;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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