IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

An alternative measure of structural unemployment

  • Uluc Aysun

    ()

    (University of Central Florida, Orlando, FL)

  • Florence Bouvet

    ()

    (Sonoma State University, Rohnert Park, CA)

  • Richard Hofler

    ()

    (University of Central Florida, Orlando, FL)

In this paper we derive an alternative measure for structural unemployment using a stochastic frontier analysis. This measure, by empirical design, is always less than total unemployment and it is, thus, more consistent with the theoretical description of structural unemployment than its usual interpretation as a smoothed long-run average of total unemployment. We find that our measure does not always track the long-run trends in total unemployment in the U.S. and when compared to the existing measures can produce different insights about the evolution of structural unemployment. Demographic and regional evidence provides some validation for our approach and allows us to determine how demographic and regional factors are related to the variation in structural unemployment across time and regions.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://www.itd.bus.ucf.edu/cdn/economics/workingpapers/2012-04.pdf
File Function: Full text
Download Restriction: no

Paper provided by University of Central Florida, Department of Economics in its series Working Papers with number 2012-04.

as
in new window

Length: 36 Pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:cfl:wpaper:2012-04
Contact details of provider: Postal:
PO Box 161400, Orlando, FL 32816

Phone: (407) 823-3266
Web page: http://business.ucf.edu/degree/bachelors-sciences-business-administration/economics/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Jackman, R & Roper, S, 1987. "Structural Unemployment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(1), pages 9-36, February.
  2. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Working Papers 1950, National Bureau of Economic Research, Inc.
  3. Laurence Ball & N Gregory Mankiw, 2002. "The NAIRU in Theory and Practice," Economics Working Paper Archive 475, The Johns Hopkins University,Department of Economics.
  4. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
  5. Robert G. Valletta & Katherine Kuang, 2010. "Is structural unemployment on the rise?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue nov8.
  6. Revoredo-Giha, Cesar & Milne, Catherine E. & Leat, Philip M.K. & Cho, Woong Je, 2009. "Efficiency of Scottish Farms: A Stochastic Cost Frontier Analysis," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(2), June.
  7. Jacob Funk Kirkegaard, 2009. "Structural and Cyclical Trends in Net Employment over US Business Cycles, 1949–2009: Implications for the Next Recovery and Beyond," Working Paper Series WP09-5, Peterson Institute for International Economics.
  8. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June.
  9. Pete Richardson & Laurence Boone & Claude Giorno & Mara Meacci & David Rae & David Turner, 2000. "The Concept, Policy Use and Measurement of Structural Unemployment: Estimating a Time Varying NAIRU Across 21 OECD Countries," OECD Economics Department Working Papers 250, OECD Publishing.
  10. Joyce Kwok & Mary C. Daly & Bart Hobijn, 2010. "Labor force participation and the future path of unemployment," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue sep13.
  11. Pascal Michaillat, 2010. "Do Matching Frictions Explain Unemployment? Not in Bad Times," CEP Discussion Papers dp1024, Centre for Economic Performance, LSE.
  12. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  13. Robert Arnold, 2008. "Reestimating the Phillips Curve and the NAIRU: Working Paper 2008-06," Working Papers 20009, Congressional Budget Office.
  14. Laurence Boone & Claude Giorno & Mara Meacci & Dave Rae & Pete Richardson & Dave Turner, 2001. "Estimating the structural rate of unemployment for the OECD countries," OECD Economic Studies, OECD Publishing, vol. 2001(2), pages 171-216.
  15. Hilary Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012. "Who Suffers during Recessions?," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 27-48, Summer.
  16. Ellen R. Rissman, 1986. "What is the natural rate of unemployment?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Sep, pages 3-17.
  17. Warren, Ronald S, Jr, 1991. "The Estimation of Frictional Unemployment: A Stochastic Frontier Approach," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 373-77, May.
  18. Justin Weidner & John C. Williams, 2011. "What is the new normal unemployment rate?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue feb14.
  19. Douglas Staiger & James H. Stock & Mark W. Watson, 1996. "How Precise are Estimates of the Natural Rate of Unemployment?," NBER Working Papers 5477, National Bureau of Economic Research, Inc.
  20. Grant, Alan P., 2002. "Time-varying estimates of the natural rate of unemployment: a revisitation of Okun's law," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(1), pages 95-113.
  21. George R. Neumann & Robert H. Topel, 1991. "Employment Risk, Diversification, and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1341-1365.
  22. Rothstein, Jesse, 2012. "The Labor Market Four Years Into the Crisis: Assessing Structural Explanations," Institute for Research on Labor and Employment, Working Paper Series qt2x576316, Institute of Industrial Relations, UC Berkeley.
  23. Roed, Knut, 1997. " Hysteresis in Unemployment," Journal of Economic Surveys, Wiley Blackwell, vol. 11(4), pages 389-418, December.
  24. Jeremy I. Bulow & Lawrence H. Summers, 1985. "A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment," NBER Working Papers 1666, National Bureau of Economic Research, Inc.
  25. Lawrence H. Summers, 1986. "Why is the Unemployment Rate So Very High near Full Employment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 339-396.
  26. Mary C. Daly & Bart Hobijn & Aysegül Sahin & Robert G. Valletta, 2012. "A Search and Matching Approach to Labor Markets: Did the Natural Rate of Unemployment Rise?," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 3-26, Summer.
  27. Salemi, Michael K, 1999. "Estimating the Natural Rate of Unemployment and Testing the Natural Rate Hypothesis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(1), pages 1-25, Jan.-Feb..
  28. Blanchard, Olivier J. & Summers, Lawrence H., 1987. "Hysteresis in unemployment," European Economic Review, Elsevier, vol. 31(1-2), pages 288-295.
  29. Lin, Zhengxi & Osberg, Lars, 2000. "How Much of Canada's Unemployment Is Structural?," Analytical Studies Branch Research Paper Series 2000145e, Statistics Canada, Analytical Studies Branch.
  30. James K. Galbraith, 1997. "Time to Ditch the NAIRU," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 93-108, Winter.
  31. repec:sae:ilrrev:v:65:y:2012:i:3:p:437-500 is not listed on IDEAS
  32. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  33. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Productivity, Volume 3: Information Technology and the American Growth Resurgence," MIT Press Books, The MIT Press, edition 1, volume 3, number 0262101114.
  34. Ludwig, Martijn & Groot, Wim & Van Merode, Frits, 2009. "Hospital efficiency and transaction costs: A stochastic frontier approach," Social Science & Medicine, Elsevier, vol. 69(1), pages 61-67, July.
  35. V. Eldon Ball & Jean‐Pierre Butault & Carlos San Juan & Ricardo Mora, 2010. "Productivity and international competitiveness of agriculture in the European Union and the United States," Agricultural Economics, International Association of Agricultural Economists, vol. 41(6), pages 611-627, November.
  36. Thirlwall, A P, 1983. "What Are Estimates of the Natural Rate of Unemployment Measuring?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(2), pages 173-79, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cfl:wpaper:2012-04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John Paul)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.