A Reduced-form Equation for the Unemployment Rate Estimated from a Panel of Nineteen OECD Countries
Item Type:Journal Article
Citation:Author/s. 'Title'. - Economic & Social Review, Vol. xxx, No. xxx, Issue, Year, ppxxx-xxx,Dublin: Economic & Social Research Institute
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Using a dynamic fixed-effects model for a panel of nineteen OECD countries and annual aggregate data, 1970-2008, we estimate a reduced-form equation for the observed unemployment rate. We find that wage-push factors, such as employment protection and union power, increase the unemployment rate, whereas net immigration reduces it, although this last effect is practically negligible. We also find that the labour market is characterised by strong “lagged adjustment processes,” so the governments of the countries in the sample have an additional incentive to fight current unemployment, to prevent it from becoming prolonged.
Publisher:Economic & Social Research Institute
Type of material:Journal Article
Availability:Full text available