Explaining ethnic unemployment and activity rates: evidence from the QLFS in the 1990s and 2000s

This article uses data from the Quarterly Labour Force Survey for 1992–95 and 2000–03 to examine changes in ethnic unemployment and economic activity. The intention was to compare the relatively high unemployment era of the 1990s with the lower unemployment era of the 2000s. Although the ethnic minority unemployment situation has improved, only half of the difference between white and non‐white unemployment can be attributed to differences in observed characteristics. This suggests that a large unexplained discriminatory element still exists for most ethnic minorities. This has become larger for Pakistani/Bangladeshi men, implying a widening of the unexplained ethnic differential.     

The unemployment experience of male immigrants in England

In this paper the unemployment experience of immigrant men in the English labour market is examined, using 1993–1994 data from the Quarterly Labour Force Survey of the United Kingdom. Hypotheses proposed by Chiswick (1982) are investigated, for both the claimant count and the ILO measures of unemployment, using logistic regression analysis. Our results show that recent white and nonwhite immigrant men experience much higher levels of unemployment than earlier cohorts. For whites, this effect is transitory, whereas for nonwhites unemployment rates adjust more slowly as the duration of stay increases. Immigrant unemployment rates also vary considerably with country of birth.     

Do Plants Decrease Pollution Reduction Efforts During a Recession? Evidence from Upstate New York Chemical Plants During the US Great Recession

US communities often experience economic hardship with plant or business closings contributing to high unemployment rates. In this circumstance, communities and local governments may prioritize economic recovery over environmental improvement, thereby weakening community and government pressure against polluting plants. In an attempt to explore the concern, this study examines the impact of local economic downturn on nearby chemical plants’ toxic release reduction behavior. A total of 351 plants in Upstate New York and their toxic release inventory data were analyzed for 5 years (2006–2010). The results show plants’ toxic release reduction efforts were reduced when unemployment and plant closing rates were high. Therefore, the findings highlight a possible limitation to regulatory approaches that rely on public pressure to motivate better environmental performance.     

The time-frequency dependence of unemployment on real input prices: a wavelet coherency and partial coherency approach

ABSTRACT

While the dependence of unemployment on real oil price and real interest rate is an important issue that has been addressed only in the time dimension, little is known about the movements of real input prices and their impact on unemployment in the time-frequency space. With a continuous wavelet coherency and partial coherency approach and monthly data of Japan and US from January 1960 to May 2017, this paper contributes to the literature by examining the characteristics of the dependence of unemployment on real input prices across frequencies and over time. The empirical results indicate that: First, a rise in real oil price leads to productivity growth slowdown and unemployment increase at the scale of 16–64 months after 1990 for Japan and 8–24 months after 2005 for US. Second, an increase in real interest rate results in higher unemployment at the 16–32-month scale before 1974 for Japan and 8–64-month scale before 2000 for US. Third, the degree of integration between labour market and energy market in US is higher than that in Japan. This study provides time-frequency evidence to the supply side hypothesis about the relationships between input prices and unemployment.     

Phillips curve in US: New insights in time and frequency

The paper explores the co-movement between unemployment and inflation rates in US by using a battery of wavelet tools. The dataset covers the period 1945Q1–2017Q4, having quarterly frequency.The main findings reveal a not stable Phillips curve in US, depending on economic context, seasonality and time-persistence. The Phillips curve is not validated during economic turbulences, while it works over expansion economic periods. Even so, the trade-off between unemployment and inflation is unstable under seasonal growth components and time-persistence, running from short- to medium-term. No link between unemployment and inflation is found in the long-term.     

The nonlinear time series properties of unemployment rates: some further evidence

The time series properties of unemployment rates for Germany, Japan, the UK and the US are re-examined. Evidence of nonlinear structure in the residuals of the most parsimonious linear ARMA models is reported for all countries except Japan. Modelling this nonlinearity using SETAR models suggests strong asymmetry in unemployment dynamics and the presence of a possible limit cycle for the UK. However, residual diagnostics for these models indicate remaining structure. Alternative TAR models conditioned on past growth rates of industrial production yield substantial reductions in residual variance over both linear and SETAR counterparts, iid residuals in all cases other than the US, and threshold values at or very near zero, clearly identifying the asymmetric behaviour of unemployment during expansionary and contractionary phases of the business cycle.     

The phillips curve and US macroeconomic performance during the 1990s

This paper identifies two competing accounts of recent US macroeconomic performance, both of which are capable of explaining the concurrence of low unemployment and low inflation experienced by the US after 1995. Econometric evidence provides partial support for both views, establishing that while there has been no change in the position of the long run Phillips curve in the US during the 1990s, this long run Phillips curve is likely not vertical. These results suggest that recent US macroeconomic performance is not sustainable and that US policy makers ultimately face a choice between higher unemployment or higher inflation in the long run.     

The Australian Economy in 2019–20: Slower Growth,Record Low Interest Rates and a Changing Housing Landscape

Economic activity in Australia slowed considerably in 2018–19, with domestic demand growth halving and unemployment rising. Consistent with the slowdown, both consumer and wage inflation have remained weak. A synchronised growth slow-down was observed across major economies, to some extent underpinned by the on-going US–China trade war. Central banks have responded to weak growth by cutting rates. The US Federal Reserve cut its target for the federal funds rate three times in 2019, as did Australia. To date, record low Australian interest rates have been associated with additional housing-related debt and asset price appreciation.     

Black–white wage differentials: duration and probability unemployment effects in a multiple of sample selection bias model

The extent to which probability and duration of unemployment affect the black–white wage differentials is examined in this paper. The paper simultaneously incorporates in the wage equation the multiple sample selection bias that occurs as a result of individuals’ propensity to be in the labor force, and the firm’s hiring decisions. The results reveal a substantial contribution of the duration of unemployment variable to the black–white wage differential, but a small portion of the differential is explained by the probability of unemployment. The results also indicate a sizeable difference between the contribution of the duration of unemployment variable to the male’s wage differentials (26%) and to the female’s (35%). The study finds that an individual’s labor force decision as well as a firm’s hiring decision are important in the wage determination process and that failure to account for the sample selectivity bias due to these two decisions will result in either underestimating or overestimating the wage differentials between black and white workers. At the macro level, the results seem to suggest that promotion of racial wage equality should be associated with policies that will minimize blacks’ incidence of unemployment and duration of unemployment spells.     

Threshold nonlinearities in unemployment rates: further evidence for the UK and G3 economies

The paper appraises the in-sample and out-of-sample adequacy of linear AR and nonlinear SETAR models of unemployment rates for Germany, Japan, the UK and the US. Tests are reported for the presence and specification of threshold nonlinearities, SETAR model estimates, limiting dynamic properties and residual diagnostics, and out-of-sample forecasting performance. In-sample, threshold non-linearities are confirmed to be strongly present for the UK, US and Germany, and more marginally so for Japan. Out-of-sample, excepting Japan, SETAR models provide superior onestep-ahead forecast on RMSE grounds, most notably for the US. Final tests indicate that these models exhibit predictive accuracy in the sense of parameter and residual variance stability, implying the potential for exploitation of such nonlinearity in official forecasting.     

The ins and outs of unemployment in Canada, 1976–2008

Abstract This paper studies the flows into and out of unemployment in Canada at an aggregate and a number of disaggregated levels. I find that inflows into unemployment are countercyclical and outflows are procyclical. At an aggregate level, changes in the rate at which individuals leave unemployment account for most of the changes in unemployment rates in Canada between 1976 and 2008. However, flows into unemployment matter more at some disaggregated levels. There are also some differences in the contributions of flows into and out of unemployment to changes in unemployment rates across the 1981–82 and 1990–92 recessions.     

Time series dynamics of US State unemployment rates

This paper examines the time series properties of state and national unemployment rates. Based upon unit root, variance ratio, and cointegration tests, as well as Granger-causality and error-correction model results, several important conclusions can be made. First, forecasting models that include only levels of unemployment rates may produce spurious regression results. Second, in the vast majority of cases, there is no long run co-movement between the aggregate US unemployment rate and individual state unemployment rates. Third, models that are specified in first-differences generally yield reliable insights into state-national unemployment relationships.     

BIASED TECHNOLOGICAL SHOCKS, RELATIVE WAGE RIGIDITIES AND LOW-SKILLED UNEMPLOYMENT

The contrast between the evolution over the last decades of the European Union (EU) and the US unemployment rates, especially for the low-skilled, is well known. A consensus view is that these different outcomes can be explained by the interactions between common shocks and specific institutional setups. In this paper, we emphasize the interactions between technological changes and wages rigidities. We construct a fully calibrated general equilibrium model with two types of jobs and two types of workers, and with search unemployment. Our simulations show that with wage rigidities, technological changes suffice to generate a continuous rise in the low-skilled unemployment rate and an almost unchanged high-skilled unemployment rate. Without wage rigidities, the unemployment rates remain unchanged but the wage dispersion widens.     

French unemployment: a transatlantic perspective

The paper compares the French and US labour markets. It shows that differences in unemployment rates are especially acute for young and old workers, but appear to be negligible for middle-aged workers. All French workers, however, experience job flows that are quite distinct from their American counterparts as they are exposed to long spells of infrequent unemployment, which is the opposite to the US case. Critical differences across ages and skills regarding the patterns of exit from and entry into employment are also displayed. The paper dispels the view that these differences originate from the behaviour of the unemployed (or the set of institutions that guide their decisions), and that this is new to the French labour market.     

Trade between Euro zone and Arab countries: a panel study

We present empirical evidence regarding unemployment dynamics for women and men in eight OECD countries. Unit-root tests are used to examine the unemployment dynamics of women and men. Failure to reject the unit-root hypothesis is consistent with unemployment hysteresis. Rejection of the unit-root hypothesis indicates that unemployment dynamics are best explained by the natural rate of unemployment or the structuralist view. We find evidence of gender differences in unemployment dynamics in Canada, Germany and the US, but not in other countries. While there are some differences in the extent of persistence across gender and across countries, the degree of persistence for both female and male unemployment rates is fairly low in all countries. Our results, therefore, contrast with substantial empirical evidence of high levels of unemployment persistence in European countries.     

Assimilation to a Welfare State: Labor Market Performance and Use of Social Benefits by Immigrants to Finland*

This paper documents the economic performance of immigrants in a country characterized by an extensive welfare state and a short immigration history. Upon arrival, immigrants to Finland have substantially lower employment rates than comparable natives. While they experience rapid employment growth, only men from OECD countries catch up with natives. Despite the persisting employment and earnings differences between non‐OECD immigrants and natives, the differences in income transfers disappear in roughly 20 years. The immigrant–native employment gaps are larger in Finland than in Australia, Canada, or the US.     

A Picture of Male and Female Unemployment among Britain's Ethnic Minorities

Using a sample of around one million observations, formed by combining two micro datasets from the 1991 Census of Population, the paper explores male and female unemployment differences across Britain's ethnic minorities. The large sample size allows a detailed multivariate analysis of females for the first time. Unemployment differences are not simply the result of characteristic differences or discrimination by the white majority. The empirical work shows that there are equally wide discrepancies in female unemployment rates, compared with males, between the white majority and the non-white ethnic minorities. Of particular interest is the comparison between UK born and foreign born ethnic minorities. Unemployment rates among the former tend to be considerably higher, but this is accounted for by characteristic differences. Thus there is no evidence that the UK born are doing worse, as the raw data suggest, but they do not seem to be becoming better assimilated either.     

Reworking the Wage Curve: Exploring the consistency of the model across time,space and demographic group

This paper extends Blanchflower & Oswald's (1994) work on the wage curve to the 50 largest metropolitan areas in the United States. The wage curve is more elastic in US metropolitan areas than prior research shows for the nation as a whole, and the wage curve varies over the business cycle, becoming more elastic in periods of higher unemployment. The most striking finding is that black workers have a more elastic wage curve than do white workers. Estimating the wage curve with the non-employment rate, a measure of underemployment, shows elasticities that are substantially higher than for wage curves estimated with the unemployment rate. This trend further increases the negative effects on pay for blacks, who are more likely than white workers to be underemployed.     

Measuring the natural rates,gaps, and deviation cycles

One definition of the natural rate is the (time-varying) steady state equilibrium rate. Then the gap is the difference between the actual and natural rates, or the forecastable movement. Although modern business cycle theories study deviation cycles (cycles in the gap), the NBER business cycle reference dates measure classical cycles (cycles in the actual rate) in the US. Measuring deviation cycles requires detrending, and this motivated the invention of the Beveridge–Nelson (B–N) decomposition. This paper considers multivariate detrending, and proposes a Bayesian approach to the multivariate B–N decomposition. An application of the method to US data gives (i) a joint estimate of the natural rates and gaps of output, inflation, interest, and unemployment with reliable error bands, and (ii) the posterior probabilities of positive gap, recession, and revival. These results may help us to identify the four phases of deviation cycles: expansion, recession, contraction, and revival.     

Impact of unemployment on happiness in the United States

This study considers the level of demonstrated happiness and unhappiness, the latter measured by the conditional probability of committing suicide within groups that are facing a higher unemployment rate and those that are not. Using individual-level US data from 1989 to 2004, our findings indicate that individuals have lower rates of suicide or are ‘happy’ when they live in a state that has lower unemployment rate.