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An alternative measure of structural unemployment

Author

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  • Uluc Aysun

    (University of Central Florida, Orlando, FL)

  • Florence Bouvet

    (Sonoma State University, Rohnert Park, CA)

  • Richard Hofler

    (University of Central Florida, Orlando, FL)

Abstract

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.

Suggested Citation

  • Uluc Aysun & Florence Bouvet & Richard Hofler, 2012. "An alternative measure of structural unemployment," Working Papers 2012-04, University of Central Florida, Department of Economics.
    • Handle: RePEc:cfl:wpaper:2012-04
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    More about this item

    Keywords

    frictional; cyclical; structural unemployment; stochastic frontier;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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