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Title:The nature of occupational unemployment rates in the United States: hysteresis or structural? PDF Logo
Authors:Candelon, Bertrand
Dupuy, Arnaud
Gil-Alana, Luis
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3571
Abstract:This paper provides new evidence on the nature of occupational differences in unemployment dynamics, which is relevant for the debate between the structural or hysteresis hypotheses. We develop a procedure that permits us to test for the presence of a structural break at unknown date. Our approach allows the investigation of a broader range of persistence than the 0/1 paradigm about the order of integration, usually implemented for testing the hypothesis of hysteresis in occupational unemployment. In almost all occupations, we find support for both the structuralist and the hysteresis hypotheses, but stress the importance of estimating the degree of persistence of seasonal shocks along with the degree of long-run persistence on raw data without applying seasonal filters. Indeed hysteresis appears to be underestimated when data are initially adjusted using traditional seasonal filters.
Subjects:Occupational unemployment
structuralist
hysteresis
structural break
fractional integration
JEL:E24
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008070279
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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