<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>This paper re-examines the empirical validity of the hysteresis hypothesis in unemployment rates by education level in 17 OECD countries. To this end, for an unbalanced panel, we employed Pesaran's Cross-Sectional Dependence (CD) and Cross-Sectionally Augmented ADF (CADF) tests. Our empirical findings provide evidence favorable to the non-stationarity of unemployment rates according to levels of primary and secondary education attainment in total unemployment, and therefore the existence of hysteresis for these levels of education. There is no evidence, however, of hysteresis for unemployment rates by tertiary education.</p></abstract>

This paper re-examines the empirical validity of the hysteresis hypothesis in unemployment rates by education level in 17 OECD countries. To this end, for an unbalanced panel, we employed Pesaran's Cross-Sectional Dependence (CD) and Cross-Sectionally Augmented ADF (CADF) tests. Our empirical findings provide evidence favorable to the non-stationarity of unemployment rates according to levels of primary and secondary education attainment in total unemployment, and therefore the existence of hysteresis for these levels of education. There is no evidence, however, of hysteresis for unemployment rates by tertiary education.

Hysteresis vs. Natural Rate of Unemployment: One, the Other, or Both?

Faculty of Economics and Administrative Sciences, Department of Economics, University of Erciyes, Kayseri, TURKEY

Faculty of Economics and Administrative Sciences, Department of Economics, University of Nigde, Nigde, TURKEY

South East European Journal of Economics and Business

{"article-title":"Hysteresis vs. Natural Rate of Unemployment: One, the Other, or Both?"}

This paper re-examines the empirical validity of the hysteresis hypothesis in unemployment rates by education level in 17 OECD countries. To this end, for an...

Hysteresis vs. Natural Rate of Unemployment: One, the Other, or Both?

Published Online: Jun 07, 2011

Page range: 91 - 94

DOI: https://doi.org/10.2478/v10033-010-0009-0

Keywords
Cross-Sectional Dependence, Hysteresis, Unit Root

This content is open access.

Hysteresis vs. Natural Rate of Unemployment: One, the Other, or Both?

Published Online: Jun 07, 2011

Page range: 91 - 94

DOI: https://doi.org/10.2478/v10033-010-0009-0

KeywordsCross-Sectional Dependence, Hysteresis, Unit Root

This content is open access.

Keywords
Cross-Sectional Dependence, Hysteresis, Unit Root