How do institutions affect structural unemployment in times of crises? | Zendy

Davide Furceri | Zendy; Annabelle Mourougane | Zendy

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How do institutions affect structural unemployment in times of crises?

Author(s) -

Davide Furceri,

Annabelle Mourougane

Publication year - 2012

Publication title -

panoeconomicus

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.289

H-Index - 14

eISSN - 2217-2386

pISSN - 1452-595X

DOI - 10.2298/pan1204393f

Subject(s) - unemployment , economics , shock (circulatory) , recession , employment protection legislation , affect (linguistics) , autoregressive model , monetary economics , macroeconomics , demographic economics , labour economics , econometrics , medicine , linguistics , philosophy

This paper examines the effect of economic crises on structural unemployment using an Autoregressive Distributed Lags model and accounting for the role of institutional settings on an unbalanced panel of 30 OECD economies from 1960 to 2006. We found that downturns have, on average, a significant positive impact on the level of structural unemployment rate. The maximum impact varies with the severity of the downturn. Institutions (such as employment protection legislation, average replacement ratio and product market regulation) influence both the extent of the initial shock and the adjustment pattern in the aftermath of an economic downturn

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