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Long-term unemployment, the invention of 'hysteresis' and the misdiagnosis of structural unemployment in the UK

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  • David Webster

Abstract

This paper investigates the empirical basis for the belief that unemployment makes people less 'employable', and that the existence of a pool of long-term unemployed people is therefore in itself a barrier to full employment. Drawing on data for Great Britain from the 1940s to the present day, it shows that this idea has arisen through misinterpretations of the statistical evidence. The resulting policies, besides diverting resources from the demand-side programmes appropriate to the true situation of structural unemployment, appear to have created a problem of the kind they were intended to address, by encouraging unemployed people to move onto sickness benefits. Copyright 2005, Oxford University Press.

Suggested Citation

  • David Webster, 2005. "Long-term unemployment, the invention of 'hysteresis' and the misdiagnosis of structural unemployment in the UK," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 29(6), pages 975-995, November.
    • Handle: RePEc:oup:cambje:v:29:y:2005:i:6:p:975-995
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    File URL: http://hdl.handle.net/10.1093/cje/bei082
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    Cited by:

    1. Davide Romaniello, 2022. "Unemployment gap, isteresi e disoccupazione di lunga durata: quale ruolo nella comprensione dell'inflazione? (Unemployment gap, hysteresis and long-term unemployment: which role in explaining inflatio," Moneta e Credito, Economia civile, vol. 75(299), pages 267-283.
    2. Ochsen, Carsten, 2008. "How the distribution of unemployment by duration affects the unemployment rate," Thuenen-Series of Applied Economic Theory 88, University of Rostock, Institute of Economics.
    3. Paternesi Meloni, Walter & Romaniello, Davide & Stirati, Antonella, 2022. "Inflation and the NAIRU: assessing the role of long-term unemployment as a cause of hysteresis," Economic Modelling, Elsevier, vol. 113(C).
    4. David Webster, 2019. "Benefit sanctions, social citizenship and the economy," Local Economy, London South Bank University, vol. 34(3), pages 316-326, May.

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