Unemployment dynamics in the OECD

Michael W.L. Elsby, Bart Hobijn, Ayşegül Şahin

Research output: Contribution to journalArticlepeer-review

88 Scopus citations

Abstract

We provide a set of comparable estimates for the rates of inflowto and outflow from unemployment using publicly available data for fourteen OECD economies. Using a novel decomposition that allows for deviations of unemployment from its flowsteady state, we find that fluctuations in both inflowand outflowrates contribute substantially to unemployment variation within countries. Anglo-Saxon economies exhibit approximately a 15:85 inflow-outflow split to unemployment variation, while continental European and Nordic countries display closer to a 45:55 split. In all economies, increases in inflows lead increases in unemployment, whereas outflows lag a ramp-up in unemployment.

Original languageEnglish (US)
Pages (from-to)530-548
Number of pages19
JournalReview of Economics and Statistics
Volume95
Issue number2
DOIs
StatePublished - 2013

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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