IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v254y2025ics0165176525003052.html

Unemployment dynamics in the United Kingdom: a quarter-millennium perspective

Author

Listed:
  • Yucel, Ali Gokhan
  • Nazlioglu, Saban

Abstract

This letter examines the persistence of unemployment in the United Kingdom (UK) using over a quarter of a millennium of data, spanning from 1760 to 2023. The results from the quantile unit root approach—accounting for non-normal distributions, structural changes, and non-linearity—reveal asymmetric unemployment dynamics. Shocks to unemployment appear transitory in low-unemployment regimes but are persistent in high-unemployment regimes. The findings highlight the importance of accounting for asymmetries in labor market adjustments.

Suggested Citation

  • Yucel, Ali Gokhan & Nazlioglu, Saban, 2025. "Unemployment dynamics in the United Kingdom: a quarter-millennium perspective," Economics Letters, Elsevier, vol. 254(C).
    • Handle: RePEc:eee:ecolet:v:254:y:2025:i:c:s0165176525003052
    DOI: 10.1016/j.econlet.2025.112468
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176525003052
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2025.112468?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Mohsen Bahmani‐Oskooee & Tsangyao Chang & Farhang Niroomand & Omid Ranjbar, 2020. "Fourier nonlinear quantile unit root test and PPP in Africa," Bulletin of Economic Research, Wiley Blackwell, vol. 72(4), pages 451-481, October.
    2. Kapetanios, George & Shin, Yongcheol & Snell, Andy, 2003. "Testing for a unit root in the nonlinear STAR framework," Journal of Econometrics, Elsevier, vol. 112(2), pages 359-379, February.
    3. Roger Koenker & Zhijie Xiao, 2004. "Unit Root Quantile Autoregression Inference," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 775-787, January.
    4. Lee, Cheng-Feng & Hu, Te-Chung & Li, Ping-Cheng & Tsong, Ching-Chuan, 2013. "Asymmetric behavior of unemployment rates: Evidence from the quantile covariate unit root test," Japan and the World Economy, Elsevier, vol. 28(C), pages 72-84.
    5. Enders, Walter & Lee, Junsoo, 2012. "The flexible Fourier form and Dickey–Fuller type unit root tests," Economics Letters, Elsevier, vol. 117(1), pages 196-199.
    6. Kurmaş Akdoğan, 2017. "Unemployment hysteresis and structural change in Europe," Empirical Economics, Springer, vol. 53(4), pages 1415-1440, December.
    7. Haiqi Li & Sung Y. Park, 2018. "Testing for a unit root in a nonlinear quantile autoregression framework," Econometric Reviews, Taylor & Francis Journals, vol. 37(8), pages 867-892, September.
    8. Ebru Çağlayan Akay & Zamira Oskonbaeva & Hoşeng Bülbül, 2020. "What do unit root tests tell us about unemployment hysteresis in transition economies?," Applied Economic Analysis, Emerald Group Publishing Limited, vol. 28(84), pages 221-238, October.
    9. Li, Haiqi & Zheng, Chaowen, 2018. "Unit root quantile autoregression testing with smooth structural changes," Finance Research Letters, Elsevier, vol. 25(C), pages 83-89.
    10. Yushi Jiang & Yifei Cai & Yi-Ting Peng & Tsangyao Chang, 2019. "Testing Hysteresis in Unemployment in G7 Countries Using Quantile Unit Root Test with both Sharp Shifts and Smooth Breaks," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(3), pages 1211-1229, April.
    11. Song, Frank M. & Wu, Yangru, 1998. "Hysteresis in unemployment: Evidence from OECD countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(2), pages 181-192.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nazlioglu, Saban & Kucukkaplan, Ilhan & Kilic, Emre & Altuntas, Mehmet, 2022. "Financial market integration of emerging markets: Heavy tails, structural shifts, nonlinearity, and asymmetric persistence," Research in International Business and Finance, Elsevier, vol. 62(C).
    2. Kilic, Emre & Yavuz, Ersin & Pazarci, Sevket & Kar, Asim, 2023. "Analyzing the efficient market hypothesis with asymmetric persistence in cryptocurrencies: Insights from the Fourier non-linear quantile unit root approach," Finance Research Letters, Elsevier, vol. 58(PC).
    3. Saban Nazlioglu & Dogukan Tarakci & Emre Kilic, 2024. "Nelson and Plosser revisited: macroeconomic and financial stability of Turkey," Empirical Economics, Springer, vol. 66(6), pages 2557-2592, June.
    4. Aysegul Corakci & Tolga Omay & Mübariz Hasanov, 2022. "Hysteresis and stochastic convergence in Eurozone unemployment rates: evidence from panel unit roots with smooth breaks and asymmetric dynamics," Oeconomia Copernicana, Institute of Economic Research, vol. 13(1), pages 11-55, March.
    5. Cheng, Ka Ming, 2022. "Doubts on natural rate of unemployment: Evidence and policy implications," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 230-239.
    6. OlaOluwa S. Yaya & Ahamuefula E. Ogbonna & Robert Mudida, 2019. "Hysteresis of unemployment rates in Africa: new findings from Fourier ADF test," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(6), pages 2781-2795, November.
    7. Oladapo Gbenga Awolaja & OlaOluwa Simon Yaya & Ahamuefula Ephraim Ogbonna & Solomon Onuche Joseph & Xuan Vinh Vo, 2021. "Unemployment hysteresis in Middle East and North Africa countries: panel SUR-based unit root test with a Fourier function," Middle East Development Journal, Taylor & Francis Journals, vol. 13(2), pages 318-334, July.
    8. Myeong Jun Kim & Sung Y. Park, 2023. "Testing for market efficiency in cryptocurrencies: evidence from a non-linear conditional quantile framework," Applied Economics Letters, Taylor & Francis Journals, vol. 30(16), pages 2245-2251, September.
    9. Mohsen Bahmani‐Oskooee & Tsangyao Chang & Farhang Niroomand & Omid Ranjbar, 2020. "Fourier nonlinear quantile unit root test and PPP in Africa," Bulletin of Economic Research, Wiley Blackwell, vol. 72(4), pages 451-481, October.
    10. Ayca Doganer, 2022. "Determining Unemployment Hysteresis in European Countries Using Linear and Nonlinear Unit Root Tests: The 1991-2020 Period," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 72(72-2), pages 753-785, December.
    11. Yi‐Ting Peng & Tsangyao Chang & Omid Ranjbar, 2022. "Analyzing the degree of persistence of economic policy uncertainty using linear and non‐linear fourier quantile unit root tests," Manchester School, University of Manchester, vol. 90(4), pages 453-471, July.
    12. Li, Haiqi & Zheng, Chaowen, 2018. "Unit root quantile autoregression testing with smooth structural changes," Finance Research Letters, Elsevier, vol. 25(C), pages 83-89.
    13. Saša Obradoviæ & Lela Ristiæ & Nemanja Lojanica, 2018. "Are unemployment rates stationary for SEE10 countries? Evidence from linear and nonlinear dynamics," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 559-583.
    14. Müge Özdemir, 2026. "Asymmetric shock persistence in the OECD Stock Exchanges: New Insight from Quantile Exponential Smooth Transition Autoregression Approach," Computational Economics, Springer;Society for Computational Economics, vol. 67(2), pages 555-608, February.
    15. Yang, Yang & Zhao, Zhao, 2020. "Quantile nonlinear unit root test with covariates and an application to the PPP hypothesis," Economic Modelling, Elsevier, vol. 93(C), pages 728-736.
    16. Omay, Tolga & Shahbaz, Muhammad & Stewart, Chris, 2021. "Is There Really Hysteresis in OECD Countries’ Unemployment Rates? New Evidence Using a Fourier Panel Unit Root Test," MPRA Paper 107691, University Library of Munich, Germany, revised 10 May 2021.
    17. Khraief, Naceur & Shahbaz, Muhammad & Heshmati, Almas & Azam, Muhammad, 2020. "Are unemployment rates in OECD countries stationary? Evidence from univariate and panel unit root tests," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    18. Fumitaka Furuoka, 2021. "Testing hysteresis in unemployment using artificial network (ANN) unit root test," Economics Bulletin, AccessEcon, vol. 41(3), pages 1947-1958.
    19. Yang, Jisheng & Wei, Jinbao & Cai, Biqing, 2022. "Quantile unit root inference for panel data with common shocks," Economics Letters, Elsevier, vol. 219(C).
    20. Khyati Kathuria & Nand Kumar, 2025. "Examining the Dynamics of India’s Major Exchange Rates Using Fourier Nonlinear Quantile Unit Root Test," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 32(3), pages 855-870, September.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:254:y:2025:i:c:s0165176525003052. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.