An alternative measure of structural unemployment

    Authors

    U. Aysun; F. Bouvet;R. Hofler

    Comments

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    Abbreviated Journal Title

    Econ. Model.

    Keywords

    Frictional; Cyclical; Structural unemployment; Stochastic frontier; STOCHASTIC FRONTIER APPROACH; NATURAL RATE; COMPOSED ERROR; LABOR-MARKETS; COMPONENTS; EFFICIENCY; MODELS; NAIRU; Economics

    Abstract

    In this paper we derive an alternative measure for structural unemployment using a stochastic frontier analysis. This measure, by empirical design, is always less than total unemployment and it is. thus, more consistent with the theoretical description of structural unemployment than its usual interpretation as a smoothed long-run average of total unemployment. We find that our measure does not always track the long-run trends in total unemployment in the U.S. and when compared to the existing measures can provide different insights into the evolution of structural unemployment. Demographic and regional evidences offer some validation for our approach and allow us to determine how demographic and regional factors are related to the variation in structural unemployment across time and regions. (C) 2014 Elsevier B.V. All rights reserved.

    Journal Title

    Economic Modelling

    Volume

    38

    Publication Date

    1-1-2014

    Document Type

    Article

    Language

    English

    First Page

    592

    Last Page

    603

    WOS Identifier

    WOS:000334137900066

    ISSN

    0264-9993

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