The Effects of Education on the Natural Rate of Unemployment

Albert E DePrince and Pamela D Morris

Business Economics, 2008, vol. 43, issue 2, 45-54

Abstract: This study develops a natural unemployment rate based upon education attainment. Behind this natural rate are labor force participation rates that vary positively with education attainment; observed unemployment rates that are inversely related to education attainment; and deviations of the observed unemployment rate from this hypothesized natural rate that are related to several expectation-based variables. With a lower natural unemployment rate today compared with years past, results point to a number of education-based challenges that employers will face. Matching employer needs with education will become more complicated as both education and needs become more specialized. Global labor markets will play an increasing role both in terms of skills and cost considerations. Next, the retirement of the baby boom generation will pose a unique challenge. Aside from the challenge of finding replacements from a pool of new workers smaller than the pool of retiring workers, retirements will not be easily predictable, thanks to the elimination of the earnings penalty for social security benefits. Finally, as college degrees become more prevalent, postgraduate studies will likely rise in importance as a distinguishing feature among skills.Business Economics (2008) 43, 45–54; doi:10.2145/20080205

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.palgrave-journals.com/be/journal/v43/n2/pdf/be200812a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/be/journal/v43/n2/full/be200812a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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:pal:buseco:v:43:y:2008:i:2:p:45-54

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11369

Access Statistics for this article

Business Economics is currently edited by Charles Steindel

More articles in Business Economics from Palgrave Macmillan, National Association for Business Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().