Unemployment persistence of different labour force groups in Finland

Tolvi, Jussi

doi:10.1080/1350485032000089886

Cited by 11 publications

(9 citation statements)

References 7 publications

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“…This condition should be differed from hysteresis, which is the fluctuation condition of worker market that owns permanent impact to the level of unemployment. This was explained by Tolvi (2003) who says that unemployment persistence or unemployment hysteresis is a phenomenon in which the level of unemployment in a region increases and requires long time to return to the previous level, or otherwise such unemployment level shall never return to its initial level.…”

Section: Theorymentioning

confidence: 99%

“…An estimation by using Panel Unit Root is utilized to obtain t-statistic that reflects the degree of persistence. Tolvi (2003) uses ARFIMA (Autoregressive Fractionally Integrated Moving Average) and LM (Lagrange Multiplier) for the Finland data. His study result shows that unemployment persistence for young worker force is lower than for all worker forces.…”

Section: Theorymentioning

confidence: 99%

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Strategy on Reducing Unemployment Persistence: A Micro Analysis in Indonesia

Soekarni¹,

Sugema²,

Widodo³

2010

BEMP

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This study has three main objectives namely: (1) examine the existence of the persistence of unemployment in Indonesia; (2) examine the factors that cause the persistence of unemployment in Indonesia and in some sample areas, and (3) formulate strategies and policy measures needed to reduce the level of unemployment.To achieve these objectives the activities we do is an empirical analysis through the modeling of Econometrics, unemployment accounting, and descriptive statistics. Meanwhile, the data used are secondary data and regional macroeconomic and primary data collected through interviews with workers, the unemployed, firms, bureaucrats, and unions.The study concludes that the persistence of unemployment in Indonesia is disequilibrium persistent unemployment without self correcting mechanism, which means that the persistence occurred outside the labor market equilibrium and has no automatic mechanism to get to the point of equilibrium. In addition, persistence is the result of the slow process of capital accumulation, wage rigidity, the length of job search, and the inertia caused by institutional factors of labor market.The main implication of this study are: (1) the need to improve the quality of growth through hands-on strategy; (2) banking policy and capital markets can lead to acceleration of capital accumulation; (3) monetary policy is more focused on inflation targeting, (4) increased total factor productivity; (5) special incentives for labor-intensive sectors; (6) strengthening vocational education, and (7) antiunemployment programs that are regionally specific.Keywords: Persistent unemployment, Disequilibrium, Wage rigidity, Job search, Indonesia.JEL Classification: J23, J31

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Section: Theorymentioning

confidence: 99%

Section: Theorymentioning

confidence: 99%

Strategy on Reducing Unemployment Persistence: A Micro Analysis in Indonesia

Soekarni¹,

Sugema²,

Widodo³

2010

BEMP

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“…Queneau and You (2011) applied ADF Unit Root test for 8 countries and found gender differences for the three countries in their study. Tolvi (2003) used the LM the NLS estimate for Finland and found unemployment is more permanent for women and youth, Koustas and Veloce (1996) found unemployment is less permanent for women and young people. In their study they used ARFIMA analysis for Canada.…”

Section: General Theory Of Hysteresis On Unemploymentmentioning

confidence: 99%

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

Bekmez¹,

Ozpolat²

2016

International Journal of Financial Research

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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.

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“…In contrast, the structuralist theory advanced by Phelps (1994) consists of "endogenizing" the natural rate of unemployment. In the struc-1 Other studies have focused on demographic differences (Clark and Summers (1981), Vedder and Gallaway (1992) and Tolvi (2003) among others) and differences between skill groups ( Teulings and Koopmanschrap (1989) and Fabiani et al (2001) among others). These studies indicate that minorities and less skilled workers have experienced persistently higher unemployment rates and greater cyclical variations.…”

Section: Introductionmentioning

confidence: 99%

The nature of occupational unemployment rates in the United States: hysteresis or structural?

2009

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. This paper provides new evidence on the nature of occupational differences in unemployment dynamics, which is relevant for the debate between the structural or hysteresis hypotheses. We develop a procedure that permits us to test for the presence of a structural break at unknown date. Our approach allows the investigation of a broader range of persistence than the 0/1 paradigm about the order of integration, usually implemented for testing the hypothesis of hysteresis in occupational unemployment. In almost all occupations, we find support for both the structuralist and the hysteresis hypotheses, but stress the importance of estimating the degree of persistence of seasonal shocks along with the degree of long-run persistence on raw data without applying seasonal filters. Indeed hysteresis appears to be underestimated when data are initially adjusted using traditional seasonal filters.JEL Classification: E24, C22, J62

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Unemployment persistence of different labour force groups in Finland

Cited by 11 publications

References 7 publications

Strategy on Reducing Unemployment Persistence: A Micro Analysis in Indonesia

Strategy on Reducing Unemployment Persistence: A Micro Analysis in Indonesia

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

The nature of occupational unemployment rates in the United States: hysteresis or structural?

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