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Hysteresis vs. Natural Rate of Unemployment: One, the Other, or Both?

Author

Listed:
  • Kula Ferit

    (Faculty of Economics and Administrative Sciences, Department of Economics, University of Erciyes, Kayseri, TURKEY)

  • Aslan Alper

    (Faculty of Economics and Administrative Sciences, Department of Economics, University of Nigde, Nigde, TURKEY)

Abstract

This paper re-examines the empirical validity of the hysteresis hypothesis in unemployment rates by education level in 17 OECD countries. To this end, for an unbalanced panel, we employed Pesaran's Cross-Sectional Dependence (CD) and Cross-Sectionally Augmented ADF (CADF) tests. Our empirical findings provide evidence favorable to the non-stationarity of unemployment rates according to levels of primary and secondary education attainment in total unemployment, and therefore the existence of hysteresis for these levels of education. There is no evidence, however, of hysteresis for unemployment rates by tertiary education.

Suggested Citation

  • Kula Ferit & Aslan Alper, 2010. "Hysteresis vs. Natural Rate of Unemployment: One, the Other, or Both?," South East European Journal of Economics and Business, Sciendo, vol. 5(1), pages 91-94, April.
    • Handle: RePEc:vrs:seejeb:v:5:y:2010:i:1:p:91-94:n:9
    DOI: 10.2478/v10033-010-0009-0
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    Cited by:

    1. Nicholas Apergis & Ibrahim Arisoy, 2017. "Unemployment and labor force participation across the US States: new evidence from panel data," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 67(4), pages 45-84, October-D.
    2. 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.

    More about this item

    Keywords

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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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