Unemployment Hysteresis by Sex and Education Attainment in the EU

Abstract

In this paper, we analyse the degree of persistence of shocks in unemployment rates for a group of 22 European countries, disaggregating the data by sex and education attainment. By means of using a long-memory model with fractional integration techniques, we find high levels of persistence in the majority of the cases with orders of integration which are around 1. Also, we find that women and those with higher education are the ones which shocks tend to have less lasting effects since they refer to the series with the lowest orders of integration, in some cases being significantly below 1 and thus showing mean reversion. Policy implications are derived from our analysis.

Testing hysteresis for the US and UK involuntary part-time employment

“…So far, an extensive list of empirical papers have addressed this specific question following different standard macro-econometric approaches: from univariate linear unit root tests in the 90s (Brunello (1990); Mitchell (1993); Neudorfer et al (1990); Røed (1996)), to panel integration methods (Bolat et al (2014); Camarero et al (2006); Camarero and Tamarit (2004); León-Ledesma (2002); Smyth (2003); Song and Wu (1998)), and finally non-linear/structural break extensions to classical unit root testing (Camarero et al (2005); Chang (2011); Furuoka (2014); Lee et al (2010Lee et al ( , 2009). We can also mention fractional integration methods for analysing unemployment Gil-Alana (2007, 2008); Caporale et al (2022); Cuestas and Gil-Alana (2011)). These empirical methods to test persistence have also been extended and applied to other labour market topics as self-employment (Congregado et al (2012); Gil-Alana and Payne (2015); Lopez-Perez et al ( 2020)).…”