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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
Assessing the Impact of the Financial Crisis on Structural Unemployment in OECD Countries
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- Stéphanie Guichard1, Elena Rusticelli1
- Author Affiliations
- 1: OECD, France
- 14 Oct 2010
- Bibliographic information
The global recession is likely to results in higher structural unemployment for some time in many OECD countries. This paper assesses how the shock to aggregate unemployment as a result of the economic crisis may be transmitted to structural unemployment through hysteresis effects that occur through the rise in long-term unemployment. The estimated increase in structural unemployment due to the crisis is estimated at ¾ percentage point in the OECD as a whole, but the paper highlights wide cross-country differences with the largest increases expected in those European countries where unemployment is increasing most and where institutional settings remain less favorable than elsewhere, notably Spain and Ireland.
- institutions, unemployment, NAIRU, hysteresis, long-term unemployment, Phillips curve
- JEL Classification:
- C13: Mathematical and Quantitative Methods / Econometric and Statistical Methods and Methodology: General / Estimation: General
- C22: Mathematical and Quantitative Methods / Single Equation Models ; Single Variables / Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes
- E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity
- E31: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Price Level ; Inflation ; Deflation
- J38: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Public Policy
- J58: Labor and Demographic Economics / Labor–Management Relations, Trade Unions, and Collective Bargaining / Public Policy
- J68: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Public Policy