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Hysteresis vs. natural rate of unemployment: One, the other, or both?

Ferit Kula () and Alper Aslan ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper re-examines the empirical validity of the hysteresis hypothesis in unemployment rates in terms of education level in 17 OECD countries. To this end for unbalanced panel, we employ Pesaran’s Cross Sectional Dependence (CD) and Cross-Sectionally Augmented ADF (CADF) tests. Our empirical findings provide that the evidence is favorable to the non-stationary of the unemployment rates by primary and secondary education attainment in total unemployment, and therefore the existence of hysteresis while there is no evidence of hysteresis for unemployment rates by tertiary education.

Keywords: Hysteresis; unemployment; the natural rate hypothesis (search for similar items in EconPapers)
JEL-codes: J21 J01 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu and nep-lab
Date: 2008-01-01
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Journal Article: Hysteresis vs. Natural Rate of Unemployment: One, the Other, or Both? (2010) Downloads
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