Modeling unemployment as an inventory: A multicointegration approach

We examine the dynamic phenomenon of unemployment as a constantly changing inventory of unemployed individuals. We focus on the possibility raised by Elsby et al. (2009) of an innate “inseparability” between the flows into and out of unemployment. Multicointegration, introduced by Granger and Lee (1989), offers a natural way to model the level of unemployment as an inventory. We find that there is multicointegration between inflows into and outflows from unemployment and the level of unemployment itself. By identifying this multicointegrating relationship, we are able to specify an error correction model for unemployment, improving forecasting ability.     

A further investigation of unemployment persistence in European transition economies

This paper analyses the dynamics of the unemployment rate in the eight countries from Central and Eastern Europe which joined the EU in 2004. Unit root tests allowing for nonlinearities and structural changes suggest that the unemployment rate is not stationary in most of the sample countries. Tests allowing for fractional integration, however, reveal that shocks are highly persistent, implying a slow rate of convergence to the natural rate of unemployment. The unemployment rate is least persistent in Hungary and Slovenia, more persistent in the Czech Republic, Slovakia and the Baltic States and extremely persistent in Poland. The degree of persistence appears to reflect the different levels of economic and institutional development in the countries and possibly also the role of the government.     

The Turkish wage curve: Evidence from the Household Labor Force Survey

This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey including 26 NUTS-2 regions over the period 2005-2008. We find an unemployment elasticity of −0.099, with a higher elasticity for younger, less educated, less experienced and female workers.     

Job-search and foreign capital inflow — A two sector general equilibrium analysis

The purpose of this paper is to extend the Fields' (1989) multi sector job-search model by introducing international trade and capital. Two types of capital are considered: fixed capital and mobile capital. The effects of search intensity and the inflow of foreign capital on the volume and the rate of urban unemployment and on the social welfare are also examined in both of the two cases. The main finding is: more efficient on-the-job search from the rural sector raises unemployment rate when capital is mobile between the two sectors. This is counterproductive to the standard result.     

Structural changes in exports of an emerging economy: Case of Turkey

This paper indicates that Turkish exports are subject to structural changes as Turkey integrates into global production networks. Integration, which leads vertical specialization in production and changes in the commodity composition of Turkish exports in favor of non-traditional commodities, paces up during economic reform periods. As the export shares of non-traditional commodities, which have higher import and income sensitivity but lower real exchange rate elasticity, increases, coefficients of the aggregate export function change accordingly. Nevertheless, high import and income elasticity of exports imply that the global growth pattern plays a significant role in determining exports of Turkey.     

The Brazilian wage curve: new evidence from the National Household Survey

This paper reconsiders the Brazilian wage curve using individual data from the National Household Survey at 27 Federative Units over the period 2002–2009. We find evidence in favor of the Brazilian wage curve with an unemployment elasticity of ?0.08. We also find that males in Brazil are significantly more responsive to local unemployment rates (?0.13) than their female counterparts. In fact, we find that the unemployment elasticity for women is statistically insignificant. Applying gender-specific unemployment rates, the elasticity for men decreases to ?0.09, while the elasticity for women remains statistically insignificant. This paper also finds that the estimates for Brazilian wage curve are completely different for the case of formal and informal workers.     

Long-term recurrence patterns in the late 2000 economic crisis: Evidences from entropy analysis of the Dow Jones index

The depth (4.5% US GDP decline and 9.5% stable unemployment) and duration (more than two years) of the present global economic recession have suggested to many researchers and practitioners to think that it is singular relative to previous recession that occurred in the aftermath of the World War II. It has been argued that the singularity of the late 2000 crises arises from non-precedent components, such as globalization and a dominant financial system equipped with exotic instruments (e.g., derivatives) designed from highly specialized mathematical theories. This paper uses the historic (1928–2010) Dow Jones index analyzed with informational entropy methods to show the presence of recurrent cycles with dominant periods of 4.5 and 22 years. For time series, entropy is a measure of the diversity of patterns for given time scales. In this form, the higher the entropy, the more complex the underlying system dynamics. It is shown that the present economic downturn coincides with the occurrence of a 22-year cycle in the entropy dynamics of the Dow Jones index. It suggests that the crisis is not singular, but its origin can be also explained from recurrent long-term patterns. Implications of the empirical results for the evolution of the late 2000 crisis and the potential aftermath courses of the global economy are discussed.     

Coalitional bargaining games with random proposers: Theory and application

We consider a non-cooperative coalitional bargaining game with random proposers in a general situation for which players differ in recognition probability and time preference. We characterize an efficient equilibrium as the generalized Nash bargaining solution that belongs to the core. The model is applied to wage bargaining between an employer and multiple workers. Although involuntary unemployment may occur in equilibrium, full employment emerges as players become sufficiently patient.     

Sector-specific productivity shocks in a matching model

Endogenous separation matching models have the shortcoming that they are barely able to replicate the Beveridge curve (i.e. the negative correlation between unemployment and vacancies) and business cycle statistics jointly. This paper builds upon the sectoral shock literature and combines its insights with the standard endogenous separation matching approach. We show that the endogenous matching model with sectoral shocks can generate an aggregate Beveridge curve and performs reasonably well in explaining business cycle facts, especially compared to the one-sector baseline model.     

Offshoring and jobs: The myriad channels of influence

Offshoring reallocates jobs inside firms, between firms, and across sectors, affecting the economy-wide unemployment rate. We study these channels in a model with labor market frictions and two sectors—a differentiated-good sector comprising heterogeneous firms that can offshore, and a homogeneous-good sector. A decline in offshoring costs affects intrafirm and intrasectoral reallocation of jobs in the differentiated-good sector through a selection effect, a productivity effect, and a job-relocation effect. The key parameters determining the impact of offshoring on jobs at various margins, as well as on the economy-wide unemployment rate, are the elasticity of substitution between inputs, the elasticity of substitution between varieties of differentiated goods, and the elasticity of demand for differentiated goods as a whole. Changes in search frictions affect unemployment both directly and through their interaction with offshoring.     

Human capital accumulation and the intertemporal elasticity of substitution of labor: How large is the bias?

I consider two different skill accumulation technologies, learning by doing and Ben-Porath type training. The effect of human capital accumulation in the form of learning by doing is to increase the labor supply elasticity estimate by a factor of 2.1 relative to the estimate that ignores human capital accumulation. The results are similar for the Ben-Porath type training technology, although the estimate of the bias is somewhat higher.     

Unemployment and the replacement ratio: Some reduced form estimates for the UK

Conventional estimates of the effects of the replacement ratio on unemployment treat output as exogenous. A reduced form approach is proposed which avoids this and results in a much reduced elasticity of unemployment with respect to the replacement ratio.     

Activating unemployed workers works; Experimental evidence from Denmark

In a field experiment in two Danish counties about half of the unemployed workers were randomly assigned to a mandatory activation program. Analyzing data from this experiment we show that activation can be very effective in reducing unemployment durations.     

Comment on 'Towards Full Employment'

The Dawkins and Freebairn paper illustrates the importance of the linkages between unemployment and social security policy, but is not entirely convincing in its explanation of unemployment, the wage-employment elasticity, and the net benefits of a negative income tax.     

Cost-based Phillips Curve forecasts of inflation

It is a well-established idea that prices are a function of marginal cost, yet estimating a reliable measure of marginal cost is difficult to do. Stock and Watson (1999) use the Phillips Curve to forecast inflation for a variety of existing activity variables that researchers commonly use to proxy for marginal cost. This paper uses a similar type of approach to examine the performance of a new candidate for the activity variable, which is marginal cost measured following the theoretical methodology of Bils (1987), which we find to be simple yet powerful when implemented empirically. We then use the Phillips Curve to conduct pseudo out-of-sample inflation forecasts for the US using: output, unemployment, hours, the labor share, the capacity utilization rate, and the new measure of marginal cost. For almost all cases, forecast errors are lowest in the regressions with the new marginal cost variable, indicating that this new measure is an improvement over previous attempts to proxy for marginal cost.     

Wage and unemployment: Evidence from online job vacancy data

This paper examines the relationship between labour market conditions and wage dynamics by exploiting a unique dataset of more than one million online job vacancies. We find a weak trade-off between aggregate wage inflation and unemployment. This link becomes more evident when the wage inflation is disaggregated at the sectoral and occupational level. The examination, using vacancy-level data, shows a negative correlation between offered wage and unemployment. The degree of wage elasticity, however, is different across regions and skill segments. Our findings suggest the importance of micro-level data's unique dimensions in examining the wage – unemployment relationship.     

Growth,unemployment and public capital

Abstract. Existing literature has studied the growth effects of fiscal policy in models with full-employment. The aim of this paper is to study these growth effects in an endogenous growth model with unemployment and compare them with the effects obtained when there is full-employment. To this end, we assume that unemployment arises due to the existence of unions. We also assume that the government finances, by means of income taxes, both public capital and an unemployment benefit. Public capital increases total factor productivity and modifies the elasticity of the labor demand. We show that the effects of fiscal policy on both employment and growth crucially depend on the relation between this elasticity and public capital. We would like to thank Jordi Caballé, Fernando Sánchez, Manuel Santos and an anonymous referee for their helpful comments. Sorolla is grateful for financial support to Spanish Ministry of Education through DGICYT grant SEC2000-0684 and to Generalitat de Catalunya through grant SGR2001-164. Raurich is grateful to Universitat de Girona for financial support through grant 9100075.     

隐性失业影响中国就业增长与经济增长的关系吗

以有关城乡隐性失业研究为依据,计算所得1978—2009年各种情形下中国就业弹性的取值及其变动趋势较稳健地证明了中国经济增长就业带动能力弱。隐性失业仅提高某些年份的就业弹性,不能改变中国就业增长与经济增长的长期关系。就业弹性暂时提高的原因是隐性失业劳动力真正失业后以很快的速度再就业。而经济增长就业带动能力弱的根本原因是就业基数较大的农业、国有与集体单位就业吸收能力不足,以及其他经济单位就业吸收能力下降。     

Reconsidering the Marginal Welfare Cost of Taxation*

A model with sticky wage rates and involuntary unemployment is used to compute the marginal cost of taxation, and these estimates are compared with those obtained from the conventional price-clearing equilibrium model. Important determinants of the marginal cost estimates are the response of sticky wages to a tax increase, the elasticity of demand for labour, and the unemployment gap. By contrast, the conventional model focuses on the elasticity of labour supply. The different models have different implications for efficient tax design. However, the new model generally agrees with the conventional model regarding significant efficiency costs of higher taxation.     

Job search and unemployment insurance: New evidence from time use data

This paper provides new evidence on job search intensity of the unemployed in the U.S., modeling job search intensity as time allocated to job search activities. The major findings are: 1) the average U.S. unemployed worker devotes about 41 min to job search on weekdays, which is substantially more than their European counterparts; 2) workers who expect to be recalled by their previous employer search substantially less than the average unemployed worker; 3) across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits, with an elasticity between ?1.6 and ?2.2; 4) job search intensity for those eligible for Unemployment Insurance (UI) increases prior to benefit exhaustion; and 5) time devoted to job search is fairly constant regardless of unemployment duration for those who are ineligible for UI.