The Rising Strength of Management, High Unemployment and Slow Growth: Revisiting Okun’s Law

Michael Reich

Institute for Research on Labor and Employment, Working Paper Series from Institute of Industrial Relations, UC Berkeley

Abstract: Why is economic growth so slow and why are we having jobless recoveries? I address these questions here by revisiting Okun’s Law, focusing not just on its cyclical component but also upon its implied estimates of trend growth. Some observers argue that the rising strength of management (falling strength of labor) since the 1980s has led to a more volatile labor market and therefore to the decay of Okun’s Law. Using cross-state data since 1964 I examine whether Okun’s Law has changed in response to the decline of unionism. I find that the cyclical component of Okun’s Law does not need revision and that the trend growth component has declined moderately.

Keywords: Social and Behavioral Sciences; High Unemployment; Slow Growth; Okun's Law (search for similar items in EconPapers)
Date: 2012-11-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.escholarship.org/uc/item/8sc8s1z1.pdf;origin=repeccitec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdl:indrel:qt8sc8s1z1

Access Statistics for this paper

More papers in Institute for Research on Labor and Employment, Working Paper Series from Institute of Industrial Relations, UC Berkeley Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff ().