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Okun’s Laws Differentiated by Education

Philippe Askenazy (), Martin Chevalier and Christine Erhel

No 1514, CEPREMAP Working Papers (Docweb) from CEPREMAP

Abstract: Our aim in this note is to set Okun’s Law in a new perspective. We argue that highly educated labour should react differently to economic downturns and recoveries than lesser-educated labour. A simple model shows that when highly educated workers are engaged in long-run projects, the adjustments of their (un)employment to GDP changes become ambiguous. If the access to capital is not too affected by the cycle, these adjustements can be the opposite of the employment changes of the lesser- educated workforce. Estimations for the United States, the European Union and across Europe support the coexistence of different Okun’s laws according to educational attainment. This observation may help to explain recent puzzling macroeconomic facts.

Keywords: Okun; low-middle educated; high-educated; business cycle (search for similar items in EconPapers)
Pages: 15 pages
Date: 2015-08
New Economics Papers: this item is included in nep-edu and nep-eec
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Related works:
Working Paper: Okun’s Laws Differentiated by Education (2015)
Working Paper: Okun’s Laws Differentiated by Education (2015)
Working Paper: Okun’s Laws Differentiated by Education (2015)
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