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The Structure of Unemployment

David H. Papell; Christian J. Murray; Hala Ghiblawi

University of Houston

The Review of Economics and Statistics 2000

We test for a unit root in postwar unemployment rates for sixteen OECD countries. When a one-time structural break is incorporated, the unit root hypothesis can be rejected for most of the countries and the measured persistence of unemployment falls dramatically. We then test for multiple structural changes and find evidence of one or two breaks for those countries for which the unit root hypothesis could be rejected. Almost all of the breaks are positive, reflecting the sustained rise in European unemployment. The major exception is the United States, where long-term unemployment rose in the 1970s and fell in the 1980s.

DOI
10.1162/003465300558696
Volume
82 (2)
Pages
309-315
Language
en
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