A new look at the discouragement and the added worker hypotheses : applying a trend-cycle decomposition to unemployment
"Using German data this study applies an unobserved-components approach to disentangle the unemployment rate into a (stochastic) trend and a cyclical part and to estimate the influence of these components on labor participation. The persistent trend component of unemployment, which triggers permanent reactions of the workers, is likely connected to a structural discouragement effect. The cyclical component, which reflects more fluctuant changes, can be linked to a shorter-term added worker effect. By splitting up the participation effect of changes in the unemployment rate our analysis differs profoundly from previous studies that present the net of both or only a single effect. For the total working population both a discouragement and an added worker effect were identified. In detailed analyses we find that the former was relevant for older workers, whereas the latter especially concerns prime aged and younger females. As many OECD countries are facing an ageing population as well as rising importance of women in the labor market, these age- and gender-specific results might be of particular interest." (Author's abstract, IAB-Doku) ((en))
|Date of creation:||12 Feb 2013|
|Date of revision:|
|Publication status:||published in: Applied Economics Letters, Vol. 20, No. 15 (2013), p. 1374-1378|
|Contact details of provider:|| Postal: |
Web page: http://www.iab.de/
More information through EDIRC
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.:
- Damon Clark, 2011. "Do Recessions Keep Students in School? The Impact of Youth Unemployment on Enrolment in Post‐compulsory Education in England," Economica, London School of Economics and Political Science, vol. 78(311), pages 523-545, 07.
- Österholm, Pär, 2009.
"Unemployment and Labour Force Participation in Sweden,"
113, National Institute of Economic Research.
- Österholm, Pär, 2010. "Unemployment and labour-force participation in Sweden," Economics Letters, Elsevier, vol. 106(3), pages 205-208, March.
- Schmerer, Hans-Jörg, 2012.
"Skill-biased labor market reforms and international competitiveness,"
Economics - The Open-Access, Open-Assessment E-Journal,
Kiel Institute for the World Economy, vol. 6, pages 1-39.
- Schmerer, Hans-Jörg, 2012. "Skill-biased labor market reforms and international competitiveness," IAB Discussion Paper 201224, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
- Stops, Michael, 2012. "Job matching across occupational labour markets," IAB Discussion Paper 201227, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
- Tano, Doki K., 1993. "The added worker effect : A causality test," Economics Letters, Elsevier, vol. 43(1), pages 111-117.
- James C. Morley & Charles R. Nelson & Eric Zivot, 2003.
"Why Are the Beveridge-Nelson and Unobserved-Components Decompositions of GDP So Different?,"
The Review of Economics and Statistics,
MIT Press, vol. 85(2), pages 235-243, May.
- Tom Doan, . "RATS programs to replicate Morley-Nelson-Zivot state space decomposition," Statistical Software Components RTZ00115, Boston College Department of Economics.
- Giuseppe Carone & Declan Costello & Nuria Diez Guardia & Gilles Mourre & Bartosz Przywara & Aino Salomaki, 2005. "The economic impact of ageing populations in the EU25 Member States," European Economy - Economic Papers 236, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
- Benati, Luca, 2001. "Some empirical evidence on the 'discouraged worker' effect," Economics Letters, Elsevier, vol. 70(3), pages 387-395, March.
When requesting a correction, please mention this item's handle: RePEc:iab:iabdpa:201301. 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: (IAB, Geschäftsbereich Dokumentation und Bibliothek)
If references are entirely missing, you can add them using this form.