The Effect of Government Size on the Steady-State Unemployment Rate: A Structural Error Correction Model

Burton Abrams and Siyan Wang ()

No 06-05, Working Papers from University of Delaware, Department of Economics

Abstract: In this paper, we investigate the relationship between government size and the unemployment rate using a structural error correction model that describes both the short-run dynamics and long-run determination of the unemployment rate. Using data from twenty OECD countries from 1970 to 1999, we find that government size, measured as total government outlays as a percentage of GDP, plays a significant role in affecting the steady-state unemployment rate. We disaggregate government outlays and find that transfers and subsidies significantly affect the steady-state unemployment rate while government expenditures on goods and services play no significant role.

Keywords: Steady-State Unemployment Rate; Government Size; Error Correction Model; Dynamic Panel Data Model; Arellano-Bond Estimator (search for similar items in EconPapers)
JEL-codes: C23 H10 H19 H50 J64 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2006
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://graduate.lerner.udel.edu/sites/default/file ... 2006/UDWP2006-05.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2006/UDWP2006-05.pdf [301 Moved Permanently]--> https://lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2006/UDWP2006-05.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:dlw:wpaper:06-05

Access Statistics for this paper

More papers in Working Papers from University of Delaware, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Saul Hoffman ().