Unemployment Dynamics, Duration and Equilibrium: Evidence from Britain

Simon Burgess () and Hélène Turon

No 2490, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper challenges the consensus on the nature of unemployment dynamics in Britain. We show that the argument that changes in unemployment arise mostly from changes in the duration of unemployment (rather than in the event of becoming unemployed) is flawed. In fact, while shocks to the outflow do have a part to play up to the late 1970s, the huge changes in unemployment over the last two decades have been mostly driven by inflow shocks. Our model also provides a new explanation of aggregate unemployment persistence based on externalities at a market level rather than individual-level persistence.

Keywords: Unemployment dynamics; Unemployment duration; Unemployment flows; Non-linear dynamics; Persistence (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Date: 2000-06
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Citations: View citations in EconPapers (20)

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Working Paper: Unemployment Dynamics, Duration and Equilibrium: Evidence from Britain (2000)
Working Paper: Unemployment dynamics, duration and equilibrium: evidence from Britain (2000)
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