Economic Growth and Regional Labor Market Development in German Regions: Okun's Law in a Spatial Context

Oberst, Christian; Oelgemöller, Jens

doi:10.2139/ssrn.2240260

Cited by 50 publications

(20 citation statements)

References 130 publications

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“…Some findings are as follows: The relation is unstable for USA and Canada (Beaton, 2010); partially valid for Germany (Oberst and Oelgemöller, 2013); valid with low rate for Central and East Europe (CEE) countries (Hutengs and Stadtmann, 2013); strongly valid for young population and weak validity for old population in Euro zone (Hutengs and Stadtmann, 2012). Also, there are different coefficients for different countries and these coefficients vary in time, while the relation is valid in the opposite way for Euro zone countries (Zanin and Marra, 2012).…”

Section: Literature Reviewmentioning

confidence: 99%

Okun’s Law and Long Term Co-Integration Analysis for OECD Countries (1987-2012)

Kargi¹

2016

emaj

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Even though, there are so many so long discussions on the relation between population increase and economic growth, today, general opinion tends to believe that there is a direct relation between population increase and economic growth. This opinion is supported by some empirical studies. Despite an economical growth caused by directly with population growth, it is known that there is a reverse relation between unemployment and growth known as Okun's Law. This relation, suggesting that every 1 point decrease in unemployment induces a 3 point increase in growth, is tested for many countries.In this study, this hypothesis of Okun is examined and it is found to be true for selected 23 countries, even with the difference in coefficients. At the same time, long term relation between growth and unemployment is tested with the use of time series analysis and long term relation is found for 14 countries. Additionally, tests done for all 34 OECD countries showed that reversed relation between unemployment and growth is valid and they are co-integrated in long run. In this study, countries are categorized according to growth rate as "low", "normal" and "high" and a consistent unemployment rate for countries with high growth rate could not be seen. In the case of countries with lowest growth rate, generalization that they have quite high unemployment rate can be made. JEL Classification: O40, O57, J64.

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Section: Literature Reviewmentioning

confidence: 99%

Okun’s Law and Long Term Co-Integration Analysis for OECD Countries (1987-2012)

Kargi¹

2016

emaj

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“…More importantly, the study examines the strength of Okun's Law under different labor market protection (LMP) settings. As Oberst and Oelgemöller (2013) argue, employment protection legislation in different national labor market settings can affect Okun's coefficients significantly. While the effect of labor market reforms upon Okun's coefficients is discussed in relevant research (Bartolucci et al, 2011;Moosa, 1997;Oberst and Oelgemöller, 2013), only a few studies adopt a relevant empirical investigation (Cazes et al, 2013;Marelli and Signorelli, 2013;Sögner and Stiassny, 2002).…”

Section: Introductionmentioning

confidence: 99%

Revisiting Okun’s Law in European Union countries

Economou

Psarianos

2016

Journal of Economic Studies

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to examine Okun's Law in European countries by distinguishing between the transitory and the permanent effects of output changes upon unemployment and by examining the effect of labor market protection policies upon Okun's coefficients. Design/methodology/approach -Quarterly data for 13 European Union countries, from the second quarter of 1993 until the first quarter of 2014, are used. Panel data techniques and Mundlak decomposition models are estimated. Findings -Okun's Law is robust to alternative specifications. The effect of output changes to unemployment rates is weaker for countries with increased labor market protection expenditures and it is more persistent for countries with low labor market protection. Originality/value -The paper provides evidence that the permanent effect of output changes upon unemployment rates is quantitatively larger than the transitory impact. In addition, it provides evidence that increased labor market protection mitigates the adverse effects of a decrease in output growth rate upon unemployment.

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“…The literature on Okun´s law at the regional level is relatively thin, including studies for U.S. regions (Freeman, 2000), states (Kuscevic, 2014;Guisinger, 2015), and metropolitan statistical areas (Kuscevic, 2014), regions of Greece (Apergis and Rezitis, 2003), the Czech Republic and Slovakia (Durech et al, 2014), France (Binet and Facchini, 2013), Germany (Oberst and Oelgemöller, 2013), and regions or provinces of Spain (Villaverde and Maza, 2009). Only a few studies find small diversity in Okun´s coefficient (e.g., Freeman, 2000), while most find significant regional diversity in the size of Okun´s coefficient.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The foundational work of Freeman (2000) has recently invigorated the research on Okun´s law at the regional level either to detect inter-regional differences in Okun´s coefficient (e.g. Apergis and Rezitis, 2003;Oberst and Oelgemöller, 2013;Durech et al, 2014;Kuscevic, 2014;Guisinger et al, 2015) or to pool regional data to obtain country-level estimates of Okun´s coefficients (e.g., Binet and Facchini, 2013;Oberst and Oelgemöller, 2013). 2 The present paper joins the latter strand of literature with the aim of estimating the validity of Okun´s law for Slovenia and each of its NUTS 3-level 3 (nomenclature of territorial units for statistics) statistical regions.…”

Section: Introductionmentioning

confidence: 99%

A Regional Panel Approach to Testing the Validity of Okun'S Law: The Case of Slovenia

Dajčman¹

2018

ECECSR

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This paper aims to study the validity of Okun´s law for Slovenia at the national and regional level applying panel data. Different panel data and panel-time series model estimators are applied to test the sensitivity of results to the issues of heterogeneity, cross-section dependence, and endogeneity of regressors. We find that Okun´s law is valid for Slovenia and 6 out of 12 of its regions. The results imply that all major issues listed in the time-series panel literature should be addressed when estimating Okun´s coefficient with panel data.This paper uses regional data on the unemployment rate and output in Slovenia for 2000-2015 to estimate Okun´s coefficient for Slovenia and each of its NUTS 3-level regions. The difference and gap models for calculation of Okun´scoefficient are estimated using estimators that allow for different levels of robustness to the main issues of time-series panel models: the fixed effects (FE) and mean group (MG) proposed by Pesaran and Smith (1995), the CCEMG proposed by Pesaran (2006), and the common correlated mean group two-stage least squares model specification (CCEMG-2SLS) proposed by Neal (2015). Applying the estimators allows us to evaluate the extent to which Okun´s coefficient is affected by the panel time series issues of heterogeneity, crosssection dependence and endogeneity of regressors.The paper is organized in five sections. After the introduction, a brief literature review is provided, followed by a description of the methodology applied. Presentation of data and the results follows in the fourth section, while the fifth section concludes the paper.

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Economic Growth and Regional Labor Market Development in German Regions: Okun's Law in a Spatial Context

Cited by 50 publications

References 130 publications

Okun’s Law and Long Term Co-Integration Analysis for OECD Countries (1987-2012)

Okun’s Law and Long Term Co-Integration Analysis for OECD Countries (1987-2012)

Revisiting Okun’s Law in European Union countries

A Regional Panel Approach to Testing the Validity of Okun'S Law: The Case of Slovenia

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