The Ins and Outs of UK Unemployment

Jennifer Smith
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Jennifer Smith: Department of Economics, University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: This paper shows that in the UK, increases in unemployment in a recession are driven by rises in the separation rate. A new decomposition of unemployment dynamics is devised that does not require unemployment to be in steady state at all times. This is important because low UK transition rates – one quarter the size of the US –imply substantial deviation of unemployment from steady state near cyclical turning points. In periods of moderation, the job finding rate is shown to have most influence on UK unemployment dynamics. Evidence comes from the first study of monthly data derived from individuals’ labour market spells recorded in the British Household Panel Survey from 1988 to 2008.

Keywords: Unemployment dynamics; Job finding rate; Separation rate JEL Classification: E24; E32 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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https://warwick.ac.uk/fac/soc/economics/research/w ... s/2010/twerp_944.pdf

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Journal Article: The Ins and Outs of UK Unemployment (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:944

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