Natural Rate Of Unemployment Research Articles

Microeconomic Determinants of Underemployment and Unemployment in Ecuador 2019–2022

The aim of this paper is to identify the microeconomic determinants of underemployment and unemployment in Ecuador before and after COVID-19. A multinomial logit model was estimated on the accumulated data from the National Employment, Unemployment and Underemployment Survey (ENEMDU) for 2019 and 2022. The results show that the average worker has a 59% probability of being in an adequate job, 35% of being underemployed and 6% of being unemployed. These probabilities change significantly depending on the worker's education and experience. In addition, significant differences were evident by gender, ethnicity, role in the home, and marital status. These differences increased after COVID-19. Thus, underemployment and unemployment promote labor inequality in Ecuador. Based on the results, the public policy should be aimed at reducing economic and opportunity inequalities because vulnerable groups were identified in the labor market.

Sociohistorical context and post-prison life course

Life-course criminology has recently begun to focus on sociohistorical context, with the use of multi-cohort studies. However, those studies have mostly concentrated on aggregate crime rates. Desistance research, in turn, has largely overlooked the impact of the broader sociohistorical context. Based on recent work on the effect of sociohistorical context on crime rates, we propose that context may shape desistance and social reintegration in a nuanced way.We examined employment, housing, and marriages among Finnish first-time prisoners released between 1995 and 2014 (N = 23,350) until 2019. We quantified the link between selected macro-level indicators and these outcomes using age-period-cohort models.The results showed that the outcomes evolved in separate ways post-release. Employment and marriage became more common over time, but only employment showed distinct periodical changes. The probability of living in housing remained stable. A higher level of national unemployment was associated with all outcomes. The association between prisoner characteristics and the outcomes changed depending on release year.Post-prison societal integration should not be assessed by one measure alone. Desistance studies should address societal context when comparing different times or countries. Early studies may require replication if the associations between demographic factors and desistance outcomes are subject to change.

PELATIHAN KEWIRAUSAHAAN UNTUK MENGEMBANGKAN UMKM DESA WIBAWAMULYA

Entrepreneurship training is training that can train participants in stages to have entrepreneurial and business competencies, train entrepreneurs and the business world, train entrepreneurs to be able to act in establishing a viable business by taking advantage of the opportunities that exist at a certain time. And in certain fields as well as developing human resources capable of creating jobs for themselves and others in accordance with development demands with the aim of creating motivation for participants so that they can improve quality and quantity. An entrepeneur has a role both internally, entrepreuner play a role in reducing the level of dependence on other people, increasing self-confidence and increasing the purchasing power of the perpetrator. Externally, an entrepreuner plays a role in providing job opportunities for job opportunities for seekers. By attacting the workforce through job opportunities provided by entrepreneurs, the national unemployment rate can be reduced. Training can also make Human Resources more critical, creative and have additional skills. Skills are an important component needed in various areas of life. These 21st century skills are life and career skills, learning and innovation skills, and media and information technology skills

Labour market skills, endogenous productivity and business cycles

This paper analyses how labour market heterogeneity affects unemployment, productivity and business cycle dynamics. To this aim, we set up a model with asymmetric search and matching frictions across skilled and unskilled workers, and endogenous productivity through R&D investment and intangible capital accumulation. Skill mismatch and skill-specific labour market institutions have three main effects on business cycles and growth dynamics. First, the relative scarcity of skilled workers increases the natural rate of unemployment and reduces total factor productivity with long-run effects on the growth rate of output. Second, skill heterogeneity in the labour market generates asymmetric outcomes and amplifies measures of employment, wages and consumption inequality. Finally, the model provides important insights for the Phillips and Beveridge curves. Incorporating skill heterogeneity leads to a flattening of the Phillips curve as wages and unemployment respond unevenly across skill types. Also, the model generates sideward shifts of the Beveridge curve following business cycle shocks, with the extent of these shifts depending on the degree of skill heterogeneity.

Iowa

The Governor’s Budget Recommendations for Fiscal Year 2024 are focused on the following prioritie ( Iowa Department of Management [DOM], 2023 ). Supporting Success at School, Promoting Healthy Families and Communities, Building Workforce Through Apprenticeships, Aligning Government to Better Serve Iowans, Combating the Fentanyl Crisis, and Protecting State Investments. Iowa’s unemployment rate has historically been below the national average. As of November 2022, the state unemployment rate was 3.1%, up from a recent low of 2.5% reached in July 2022, but still down 0.8% from one year ago. The national unemployment rate was 3.7%. Iowa’s labor force remains below its pre-pandemic level, albeit it is improving.

The intersection between traditional roles and a fragmented labor market: a propensity score matching analysis of gender wage gap in Ecuador

PurposeThis study aims at estimating the gender wage gap in Ecuador, and its evolution over the last decade and a half, exploring its heterogeneity through different working conditions (formal/informal, full employment/underemployment, short term/long term and tenure/no tenure) and workers personal characteristics (education level; age and children).Design/methodology/approachPropensity score matching (PSM) and coarsened exact matching (CEM) are used to examine the gender pay inequality of wage earners in Ecuador, using the National Employment, Unemployment and Underemployment Survey (ENEMDU) data set from 2007 to 2022.FindingsResults show a persistent gender pay gap, evidencing a significant heterogeneity through the different dimensions taken into account, in terms of working conditions and workers personal characteristics. The evolution of the pay gap during the years analyzed hardly shows any reduction of differences in earnings between men and women; on the contrary, women exposure to precarious and unregulated jobs seems to be increasing wage inequality.Practical implicationsThe results make the case for active policies oriented not only at containing the negative effects of the traditional division of labor within the family but also at improving labor law enforcement, mitigating informality and workers rapid turnover.Originality/valueThis study is one of the few that use matching techniques to study the gender wage gap and the first in Ecuador; the time span taken into account is larger than previous studies, allowing a medium-long run perspective across different economic phases.

Unemployment Hysteresis in African Oil Exporting Countries: Evidence from Fourier Unit Root Test

This study investigates the stochastic properties of unemployment rate in top ten African oil exporting countries, by examining whether the high unemployment rate in these countries are mean reverting or non-stationary. Using annual data spanning between 1991 and 2023, the study employs a battery of unit root tests, namely, Classical ADF, Fourier ADF (FADF), ADF with Structural Break (ADF-SB) and Fourier ADF with Structural Break (FADF-SB) to test which of the hypothesis of unemployment (natural rate hypothesis, hysteresis hypothesis and structural slump hypothesis) do the unemployment behaviours in African oil exporting countries actually belong to. Findings from the study reveal the superior functionality of FADF-SB over the other unit root tests, stemming from the ability of the ADF model laced with both Fourier and Structural Break to revert the high unemployment rates of all the reviewed countries to equilibrium. Based on the findings in this study, it is therefore concluded that the characteristics of unemployment rate in African oil exporting countries align with and support the structural slump hypothesis of unemployment and thereby recommended that the structural factors should be modelled in the unemployment trend of their economies.

Unemployment hysteresis in Central and Eastern European countries during EU-membership

AbstractThis study aims to analyse the time series properties of the unemployment rates in 10 Central and Eastern European countries after joining the European Union. Three types of unit root tests were conducted: (1) linear unit root tests, namely ADF, PP, LM, and RALS-LM tests; (2) LM and RALS-LM unit root tests with two structural breaks; and (3) LM and RALS-LM unit root tests with Fourier function. The results reveal that the hysteresis hypothesis is valid for Bulgaria, Czechia, Hungary, Latvia, Lithuania, Romania and Slovenia, whereas the structuralist hypothesis is valid for Estonia and Poland. However, the natural rate hypothesis holds only for Slovakia.

Fitting data to a multiple structural measurement errors model

This paper proposes two new estimation methods to fit a multiple structural measurement error model when all variables are subject to errors. The new estimation methods were extensions of the Wald estimation method, one is the weighted grouping method, and the other is the iterative method. A Monte Carlo experiment is performed to investigate the performance of the new estimators compared with the classical estimation methods; the Maximum Likelihood Estimator and Method of Moment, in terms of root mean square error and its bias. The simulation outcomes demonstrated that the suggested estimators are more effective than conventional estimators. In addition, real data analysis is discussed to examine the relationship between the national gross domestic product, unemployment rate, and human development index after applying the two proposed estimation methods.

Empirical Evidences Regarding Okun's Law in the Central and Eastern Europe in the Post – Financial Crisis Period

Abstract Numerous studies have been conducted based on Okun’s Law (1962), researchers proposing various approaches, while the two most common are the difference approach, which reflects the link between the variation of unemployment rate and the output growth, and the gap approach, which shows the relationship between the deviation of the actual unemployment rate from the natural unemployment rate and the Gross Domestic Product (GDP) gap. In order to see how the relationship looks like over time and how the Okun’s coefficient varies from country to country, this study analyzes the sensitivity of unemployment at output changes while carries out a comparative analysis for Central and Eastern Europe (CEE) countries, regarding Okun's Law applicability in the post-financial crisis period, taking into consideration previous relevant researches. Therefore, the assessment is based on quarterly data, between 2010 and 2019, for unemployment and economic growth, recorded in five CEE countries, members of the Organization for Economic Co-operation and Development (OECD): Bulgaria, Czech Republic, Hungary, Poland and Romania. While the research is based both on the gap and difference method, it may lead to results sensitive to the method chosen in order to assess the unobservable variables, namely potential output and natural unemployment rate. In order to determine the structural components of the GDP and unemployment rate, it is used the Hodrick-Prescott univariate filter, applied on quarterly data. Before estimating the Okun's coefficient, the study also examines the causality relationship between unemployment and GDP using Granger causality test.

Unemployment rate inches up during 2023, labor force participation rises

The U.S. labor market continued to expand in 2023. Although there was an uptick in unemployment in the second half of the year, the national unemployment rate remained below 4 percent throughout 2023. The labor force participation rate, at 62.6 percent in the fourth quarter, increased over the year. Notable labor market improvements occurred among people of prime working age (those ages 25 to 54); these improvements were most pronounced among women.

The role of social effects in shaping beliefs about the economy

Abstract We use survey data to demonstrate that individuals extrapolate from their social environment when forming estimates about aggregate economic outcomes (e.g. the aggregate homeownership rate). In a first approach, we follow the previous literature and construct hypothetical peer groups using information on the location, age, and education of respondents. We confirm that the average homeownership rates in these ‘constructed peer groups’ affect respondents’ subjective estimates of national homeownership rates. In a second approach, we extend the previous literature and utilize direct information provided by survey participants about the characteristics of their peer groups. We show that these ‘self-assessed peer groups’ are even better predictors for how survey respondents assess the aggregate measure. We show that the same mechanisms are at work for estimates of the national unemployment rate. We also demonstrate that individuals who are less knowledgeable about economic matters rely more on peer group information.

Monetary Policy, Employment Shortfalls, and the Natural Rate Hypothesis

Activity shortfalls are more costly than strong activity. I consider optimal monetary policy under discretion with an asymmetric (activity shortfalls) loss function. The model satisfies the natural rate hypothesis. The asymmetric loss function and resulting optimal monetary policy exacerbates shortfalls in activity. The additional frequency of activity shortfalls arises from the adjustment of expectations implied by the natural rate hypothesis. The shortfalls asymmetry leads to an inflationary bias, similar to results in the time-consistency literature. Mandating a central bank objective with greater symmetry than the social loss function improves outcomes. Greater symmetry lowers the magnitude of activity shortfalls. Greater symmetry also reduces inflation bias. The model also implies that an optimal monetary policy does not accommodate fluctuations from aggregate demand shocks, as is standard in such models. As a result, the analysis implies that monetary accommodation of strength in economic activity likely requires justifications other than asymmetric costs of shortfalls.

The unemployment–inflation trade-off revisited: The Phillips curve in COVID times

Using a New Keynesian Phillips curve, we document the rapid and persistent increase in the natural rate of unemployment, ut∗, in the aftermath of the pandemic and characterize its implications for inflation dynamics. While the bulk of the inflation surge is attributed to temporary supply factors, we also find an important role for current and expected negative unemployment gaps. Through the lens of the model, the 2022–2023 disinflation was driven by the expectation that the unemployment gap will close through a progressive decline in ut∗ and a rise in the unemployment rate. This implies that convergence to long-run price stability depends, critically, on expectations about labor market tightness. Using a variety of cross-sectional data sources we provide corroborating evidence of unusually tight labor market conditions, consistent with our estimated rise in ut∗.

Youth Entrepreneurship: Essential Tool for Socio-economic Development and Growth

A consistent surge in the population of young people in prior years made it imperative for attention to issues related to youth unemployment to transcend national borders to include regional and global levels. Thus, issues related to youth, specifically youth unemployment, gained global recognition several decades ago. However, the decades-long initiatives of the United Nations to address youth unemployment challenges have yielded little or no socio-economic results. The purpose of this research was to examine the implications of youth unemployment rates for national and global unemployment rates during the research period. The quantitative approach to scientific inquiry was adapted and used in the study. Specifically, a cross-sectional design formed the basis of the research. Data required for the conduct of the research were obtained mainly from secondary sources. These included textbooks, peer-reviewed articles published in journals and grey literature from youth advocates. Other sources were Google Search Engine, including Ghana Statistical Service, Ghana’s Ministry of Youth and Sports, UN, UNESCO, UNICEF, UNCTAD, UNFPA, UNDP, OECD and EU, and electronic databases of the World Bank, ILO and Commonwealth, among other significant sources. Respective data on Ghana’s annual youth unemployment rates and national unemployment rates from 2000 through 2019, as well as respective 2019 national youth unemployment rates and national unemployment rates for one hundred and eighty-seven (187) economies, were used in the research. Descriptive statistics and regression models were used to describe the research variables and to evaluate their behaviour over the stated time frame on national and global unemployment rates. The study revealed that widespread joblessness is taking an adverse toll on this generation’s ability to contribute its meaningful quota towards a prosperous, happy and healthy future. The level of progress made in business development by most advanced, emerging and developing economies was not found to have a strong relationship with youth-centred policies and programmes. As of 2016, the United States and Canada had no national youth policy. Findings from the research revealed a positive and significant relationship between the youth unemployment rate and national unemployment rate (coefficient value = 0.489206843; p = 0.000, p < 0.05) and a positive but non-significant relationship between global youth unemployment rate and global unemployment rate (coefficient value = 0.447986211; p = 4.60249, p > 0.05). Youth unemployment rate accounted for about 52.97% of the variation in national unemployment rate; while global youth unemployment rate accounted for about 86.05% of the variation in global unemployment rate during the period. The statistical analysis confirmed and validated, to a large extent, the severity of the youth unemployment phenomenon at the national level, a clarion call for active participation of the youth in policy formulation and implementation process, and the need for expeditious implementation of youth intervention programmes such as youth entrepreneurship to assure effective participation of the youth in the national development agenda. There is an urgent need for global economies to thoroughly examine their existing financing models and emerge with financial products tailored to address the specific financial needs of participating young people to ensure the success of intended youth development programmes. Encouraging performance-based lending to the neglect of collateral-based lending would draw each economy closer to the realisation of this objective. Embedding youth entrepreneurial initiatives in well-rehearsed and thought-out national youth policy and walking the talk through practical implementation would facilitate the transformation of current and projected increase in regional and world youth populations from socio-economic liabilities to competitive, productive and invaluable assets at the national, sub-regional, regional and global levels.

National unemployment rates and the meaning of work: a cross-level examination

ABSTRACT This paper examines how and why work meaning (i.e., what work signifies to an individual) is affected by a macroeconomic indicator: the national unemployment rate. We conducted three studies that explore how and why perceptions of work meaning are related to the unemployment rate of the country in which the work is embedded. Study 1 utilized cross-national data from the International Social Survey Programme and revealed that higher unemployment rates in a country were associated with employees placing less emphasis on the non-financial aspects of work meaning; Study 2 used data from the General Social Survey and found that during worse economic conditions, employees in the US tended to prioritize financial job meaning more. In Study 3, an experiment similarly found that individuals placed more emphasis on financial work meaning in the high unemployment condition compared to the control condition. It also identified the important mediating role of individual experience of uncertainty in explaining such relationships. This paper discusses how our findings contribute to better understandings of the societal-level antecedents of work meaning.

Hysteresis in Youth Unemployment in Sub-Saharan Africa: Focus on Gender, Income, and Region

ABSTRACT: Despite innumerable government policies to reduce youth unemployment in Sub-Saharan Africa, the problem persists. This study examines the extent to which the hysteresis effect exists in the youth unemployment rate in Sub-Saharan African countries during the period 1991 to 2021, disaggregated according to territorial delineation, income, and gender. First, we employ the univariate and panel unit root tests including the Augmented-Dickey-Fuller, Phillips-Perron, the Dickey-Fuller-Generalized Least Square by Elliott, Rothenberg, and Stock (1996), the ADFmax by Leybourne (1995), and the Kwiatkowski, et al. (1992) test, to enable comparison with previous studies. The Pesaran's (2007), test is then applied to account for cross-sectional dependence. Finally, the Zivot–Andrews single structural break by Zivot and Andrews (1992), Clemente–Montane–Reyes two structural breaks unit root tests by Clemente, Montañés, and Reyes (1998), as well as the Karavias-Tzavalis panel unit root test with structural breaks by Karavias and Tzavalis (2014) are employed. The univariate unit root tests generally support the hysteresis hypothesis (within a band of 60% to 97%) for almost all countries, and sub-regions in SSA. However, accounting for structural breaks, the hysteresis effect in total youth unemployment is only visible in 19 countries (40%), with evidence of gender disparities pointing to the hysteresis effect in females only in 16 countries (34%), and, in males only in 10 countries (21.3%). The lower-middle-income countries reject the natural rate hypothesis in total and both male and female youth unemployment rates. While only male youths suffer from the hysteresis in low-income countries, the total youth in upper-middle-income countries shares this effect. Accounting for cross-section dependence alters the finding of the hysteresis effect only in males in Southern Africa and upper-middle-income countries. A one-size-fits-all policy may not work. Instead, we recommend an integral approach aimed at the creation of employment opportunities for youth and females, including but not limited to diversification of economic activities in rural areas to reduce urbanization, skills training, political and economic stability, cultural transformation to remove unnecessary gender-related employment discrimination, as well as improved economic integration policies. For countries found to exhibit the natural rate hypothesis, it may not be necessary to engage in costly policies to return the youth unemployment rate to equilibrium since the shock is only temporary.

Modern Analyses of Macroeconomic Indices for Medium and Long Term Plans in Georgia

This paper analyzes the economic growth of Georgia through the lens of two key indicators: income/GDP per worker (representing productivity) and income/GDP per capita (representing prosperity). It emphasizes the importance of using Purchasing Power Parity (PPP) adjusted data to avoid misleading comparisons between countries with different price levels. The paper highlights three key stylized facts about Georgia's economy: Transformational Shock: Georgia's GDP per capita fell dramatically by 468% in less than ten years due to the collapse of the Soviet economic system. This is a unique event in modern economic history, with no other country experiencing such a sharp decline; Unstable Growth Rates: Unlike the U.S. which shows a relatively stable 2% annual growth rate over 150 years, Georgia's economic growth rates lack a clear trend and fluctuate significantly; Negative Correlation Between Cyclical Unemployment and GDP Gap: The cyclical unemployment rate and the GDP gap in Georgia are inversely correlated. As the unemployment rate falls below the natural rate of unemployment, the GDP gap widens, indicating potential overheating in the economy. The paper argues that existing models of economic growth, often based on developed economies with different macroeconomic realities, may not be suitable for analyzing Georgia's situation. It calls for the development of models that explicitly consider the unique features of Georgia's economy, including the transformational shock, unstable growth rates, and the relationship between unemployment and GDP. Overall, the paper raises important questions about the nature of economic growth in Georgia and the need for tailored models to understand its specific dynamics.

Linear and nonlinear analysis for testing the hysteresis hypothesis in Türkiye

Unemployment is an important socioeconomic problem. Economic shocks especially affect the economies of developing countries negatively. The hysteresis hypothesis expresses the view that temporary shocks can have a permanent effect on unemployment rates. The hysteresis hypothesis can be considered as an objection to the natural rate hypothesis. From a unit root perspective, if the series contain a unit root, hysteresis hypothesis is valid. If not, hysteresis hypothesis is not valid. This study aims to test the hysteresis hypothesis by using data covering the period of 2014M01-2023M07 in the Turkish economy. In the study, general unemployment and youth unemployment rates have been discussed. Some of the most commonly used linear and nonlinear unit root tests in applied studies have been included in the study in order to make comparisons. By detecting that the series are nonstationary according to linear and nonlinear unit root tests, it can be inferred that hysteresis hypothesis is valid in Türkiye. This shows that the effects of shocks are permanent. Effective policies against unemployment need to be developed.

A European Unemployment Benefit to Protect Atypical Workers?

This paper evaluates the potential of a common unemployment insurance scheme for the Economic and Monetary Union (EMU-UI) to improve income protection of atypical workers, namely those in part-time and temporary contracts. Our approach relies on simulating entitlements to national unemployment insurance and the EMU-UI to assess their effects on the household disposable income of atypical workers in the event of unemployment. Our results show that the introduction of an EMU-UI would reduce coverage gaps and increase net replacement rates, especially for atypical workers, and would protect a large share of the workforce against the risk of poverty. Extending eligibility for the EMU-UI to the self-employed would further improve income protection, reducing their risk of falling into poverty in the event of unemployment.