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

• Authors: Ferit Kula , Alper Aslan
• Languages of publication: EN

Abstracts

EN

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.

Keywords

EN

Cross-Sectional Dependence; Hysteresis; Unit Root

• Publisher: Sciendo
• Journal: South East European Journal of Economics and Business
• Year: 2010
• Volume: 5
• Issue: 1
• Pages: 91-94

Dates

published

2010-04-01

online

2011-06-07

Contributors

author

Ferit Kula

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

author

Alper Aslan

• Faculty of Economics and Administrative Sciences, Department of Economics, University of Nigde, Nigde, TURKEY

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Identifiers

DOI

10.2478/v10033-010-0009-0