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The measurement and determination of Okun's Law: Evidence from state economies

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  • Blackley, Paul R.

Abstract

Okun's Law is estimated for 26 states in the United States. An average of 3.1 percentage points of additional state-level output growth is found to be required for each percentage point reduction in a state's unemployment rate. Interstate differences in industrial mix, the age and gender distributions of the labor force, the rate of labor force growth over the sample period, and tax policy decisions are significantly related to spatial variation in Okun's Law. The results lend support to and extend previous explanations of the value of Okun's Law for the national economy.

Suggested Citation

  • Blackley, Paul R., 1991. "The measurement and determination of Okun's Law: Evidence from state economies," Journal of Macroeconomics, Elsevier, vol. 13(4), pages 641-656.
  • Handle: RePEc:eee:jmacro:v:13:y:1991:i:4:p:641-656
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    Cited by:

    1. Roger Perman & Gaetan Stephan & Christophe Tavéra, 2015. "Okun's Law—a Meta-analysis," Manchester School, University of Manchester, vol. 83(1), pages 101-126, January.
    2. Roger, Perman & Gaetan, Stephan & Christophe, Tavéra, 2013. "Okun’s law – A meta analysis," SIRE Discussion Papers 2013-59, Scottish Institute for Research in Economics (SIRE).
    3. Casto Montero Kuscevic, 2014. "Okun’s law and urban spillovers in US unemployment," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 719-730, November.
    4. Guisinger, Amy Y. & Hernandez-Murillo, Ruben & Owyang, Michael T. & Sinclair, Tara M., 2018. "A state-level analysis of Okun's law," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 239-248.
    5. repec:spr:lsprsc:v:10:y:2017:i:3:d:10.1007_s12076-017-0189-7 is not listed on IDEAS
    6. Revoredo-Giha, Cesar & Leat, Philip M.K. & Renwick, Alan W., 2012. "The relationship between output and unemployment in Scotland: A regional analysis," Working Papers 131465, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    7. Antal, Miklós, 2014. "Green goals and full employment: Are they compatible?," Ecological Economics, Elsevier, vol. 107(C), pages 276-286.
    8. Durech, Richard & Minea, Alexandru & Mustea, Lavinia & Slusna, Lubica, 2014. "Regional evidence on Okun's Law in Czech Republic and Slovakia," Economic Modelling, Elsevier, vol. 42(C), pages 57-65.
    9. Rui Pereira, 2014. "Okun’s law, asymmetries and regional spillovers: evidence from Virginia metropolitan statistical areas and the District of Columbia," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 583-595, March.
    10. Vakulenko, Elena, 2015. "Analysis of the relationship between regional labour markets in Russia using Okun’s model," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 40(4), pages 28-48.

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