Unemployment Dynamics in the OECD
47 Pages Posted: 15 Jan 2009 Last revised: 11 Dec 2022
Date Written: December 2008
Abstract
We provide a set of comparable estimates for the rates of inflow to and outflow from unemployment for fourteen OECD economies using publicly available data. We then devise a method to decompose changes in unemployment into contributions accounted for by changes in inflow and outflow rates for cases where unemployment deviates from its flow steady state, as it does in many countries. Our decomposition reveals that fluctuations in both inflow and outflow rates contribute substantially to unemployment variation within countries. For Anglo-Saxon economies we find approximately a 20:80 inflow/outflow split to unemployment variation, while for Continental European countries, we observe much closer to a 50:50 split. Using the estimated flow rates we compute gross worker flows into and out of unemployment. In all economies we observe that increases in inflows lead increases in unemployment, whereas outflows lag a ramp up in unemployment.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Incentives in Competitive Search Equilibrium
By Espen R. Moen and Asa Rosen
-
The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited
By Marcus Hagedorn and Iourii Manovskii
-
The Cyclical Behavior of Equilibrium Unemployment and Vacancies: Evidence and Theory
-
Incentives in Competitive Search Equilibrium and Wage Rigidity
By Espen R. Moen and Asa Rosen
-
Incentives in Competitive Search Equilibrium and Wage Rigidity
By Espen R. Moen and Asa Rosen
-
Search-Theoretic Models of the Labor Market: A Survey
By Richard Rogerson and Randall Wright
-
Search-Theoretic Models of the Labor Market-A Survey
By Richard Rogerson, Robert Shimer, ...
-
Unemployment Fluctuations with Staggered Nash Wage Bargaining
By Mark Gertler and Antonella Trigari
-
Employer-to-Employer Flows in the U.S. Labor Market: The Complete Picture of Gross Worker Flows