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Unemployment Dynamics in the OECD

Michael Elsby¹; Bart Hobijn^2,3; Ayşegül Şahin⁴

¹ University of Edinburgh · ² Tinbergen Institute · ³ Federal Reserve Bank of San Francisco · ⁴ Federal Reserve Bank of New York

We provide a set of comparable estimates for the rates of inflow to and outflow from unemployment using publicly available data for fourteen OECD economies. Using a novel decomposition that allows for deviations of unemployment from its flow steady state, we find that fluctuations in both inflow and outflow rates contribute substantially to unemployment variation within countries. Anglo-Saxon economies exhibit approximately a 15:85 inflow-outflow split to unemployment variation, while continental European and Nordic countries display closer to a 45:55 split. In all economies, increases in inflows lead increases in unemployment, whereas outflows lag a ramp-up in unemployment.

DOI

10.1162/rest_a_00277

Volume

95 (2)

Pages

530-548

Language

en

Export

BibTeX

Sources

crossref openalex