Hysteresis Effect on Unemployment for Men and Women: A Panel Unit Root Test for OECD Countries

Abstract

There are two major hypotheses about the dynamics of unemployment in the literature: (i) natural rate of employment hypothesis, (ii) unemployment hysteresis hypothesis. The natural rate of employment hypothesis (NAIRU) implies a stable relationship between unemployment and business cycles in the long run. This means economic shocks arising in the business cycle creates a temporary imbalance in the unemployment rate. In other words, after an economic shock, the unemployment rate will return to long-term equilibrium level. In contrary to this argument, according to unemployment hysteresis hypothesis, unemployment move away from equilibrium state due to economic shocks and this state continues in the long run. The persistent imbalance means that unemployment have mean-deviation in the long run. As econometric approach, the unemployment series have an unstable trend. If unemployment rate is stable in the long run, the hysteresis effect becomes not valid. That is why the relationship between unemployment rate and business cycle will be the main issue of this study. According to that the hysteresis effect on unemployment rate in OECD countries has been analyzed. In this research the hysteresis effect on unemployment for women and men has also been separately examined. Thus, the research would allow us to distinguish and compare the gender differentiation within the OECD countries. The models have been estimated using yearly unemployment rate data from 1991 to 2014 for OECD countries and obtained from ILO statistics. Within the mentioned context above, Hysteresis effect has been analyzed with Panel Unit Root Tests, which both allowing and not allowing structural breaks. It is expected that the hysteresis effect on unemployment differs in terms of both gender and country level.

Türkiye’de Genç Kadın İşsizliğinde Histeri Etkisi: Fourier ADF Testinden Kanıtlar

“…Bu çalışmaların önemli bir kısmında değişken olarak genel işsizlik oranı serisine odaklanılmıştır (Romero-Avila ve Usabiaga, 2007; Lee ve Chang, 2008;Ener ve Arıca, 2011;Chou ve Zhang, 2012;Kahyaoğlu vd., 2016;Yavuzaslan vd., 2017;Yıldırım ve İnançlı, 2018;Akkuş ve Topuz, 2019;Nsenga vd., 2019;Sigeze vd., 2019). Bununla birlikte literatürde histeri etkisinin varlığını genç işsizlik oranlarında (Dursun ve Kara, 2016;Akcan, 2019) ve cinsiyete dayalı işsizlik oranlarında (Koustas ve Veloce, 1996;Tolvi, 2003;Queneau ve Sen, 2008;Bakas ve Papapetrou,2014;Bekmez ve Özpolat, 2016;Özpolat ve Nakıoğlu-Özsoy, 2018;Önal, 2021) sınayan çalışmalar da mevcuttur. Çalışmalarda ampirik analiz yöntemi olarak birim kök testleri kullanılmaktadır (Arestis ve Mariscal, 2000;Camarero vd., 2006;Yılancı, 2009;Saraç, 2014;Li vd., 2021).…”

“…Diğer bir ifadeyle, genç kadın işszlik oranının doğal işsizlik oranından sapmalarının kalıcı olduğu ve işgücü piyasaları tarafından belirlenen uzun vadeli dengesine geri dönmek için esnek olmadığı sonucu elde edilmiştir. Çalışmadan elde edilen bu bulgu, kadın işsizliğinde histeri etkisini raporlayan Bakas ve Papapetrou (2014),Bekmez ve Özpolat (2016),Peker ve Boyraz (2019),Önal (2021)'in çalışmaları ile uyumludur.…”

Does gender matter for the unemployment hysteresis effect among Asian countries?

“…This tends to render them unemployed during shocks, thus increasing their vulnerability. However, Bekmez and € Ozpolat (2016) consider the unemployment hysteresis effect for both males and females. They do not find evidence of the gender gap, but the difference between male and female labor structure has been proved.…”

“…Therefore, the hypothesis of hysteresis or natural unemployment may vary among genders. Few studies concentrate on this point, such as Bekmez and € Ozpolat (2016). They distinguish the difference between males and females; however, they do not consider Asian regions.…”

Unemployment gender inequality: evidence from the 27 European Union countries

“…To examine the relation between the levels of the unemployment and levels of the unemployment gender inequality, we test univariate gender inequality series of countries with a battery of unit root tests, both with and without structural breaks included. Tests that were used in this paper, to validate the hysteresis hypothesis in the unemployment gender inequality series, were taken from the hysteresis hypothesis validation in unemployment rates, performed by Lanzafame (2010), Camarero et al (2008), Gozgor (2013), Bekmez and Ozpolat (2016), Sandberg (2016) and Garcia-Cintado et al (2015). Hysteresis in unemployment gender gaps was analyzed by Queneau and Sen with ADF unit root test (Queneau and Sen 2007), LM test (Queneau and Sen 2009a) and Phillips-Perron test which allows for one structural break (Queneau and Sen 2009b), who discovered that gender inequality is disappearing with time.…”