Unraveling unemployment hysteresis in Nordic countries: a multifaceted analysis of age, gender and frequency differentials

Veli Yilanci, Mustafa Kırca, Şeri̇f Canbay and Muhlis Selman Sağlam

International Journal of Manpower, 2023, vol. 45, issue 6, 1093-1111

Abstract: Purpose - This study aims to test the unemployment hysteresis hypothesis for Nordic countries by considering age and gender differentials at various frequencies. Design/methodology/approach - First, the authors test the linearity of the unemployment series and apply appropriate unit root tests based on the linearity test results. The authors use these tests for both original and wavelet-decomposed unemployment rates. Findings - The authors' findings indicate that the results obtained from the original and decomposed series differ. While the authors find evidence of unemployment hysteresis in the six unemployment rates in the short run, they observe supportive results for hysteresis in the three unemployment rates in the long run. Originality/value - The authors take into account different age and gender groups. Furthermore, the authors propose a testing strategy for unemployment hysteresis that considers the nonlinearity and structural breaks in unemployment rates. Finally, the authors determine whether the unemployment hysteresis is valid at various frequencies.

Keywords: Nonlinearity; Structural breaks; Unemployment hysteresis; Wavelet decomposition; Age; Gender (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:ijm-03-2023-0147

DOI: 10.1108/IJM-03-2023-0147

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