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Okun's Law, Development, and Demographics: Differences in the Cyclical Sensitivities of Unemployment Across Economy and Worker Groups
Author:
Zidong An null

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Mr. John C Bluedorn
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Gabriele Ciminelli null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 270
Language:
English
Publication Date:
12 Nov 2021
DOI:
https://doi.org/10.5089/9781616356040.001
ISBN:
9781616356040
ISSN:
1018-5941
Pages:
22
Keywords:
unemployment; business cycles; Okun’s Law; demographics; economy group; unemployment across economy; women's unemployment; cyclical sensitivities of unemployment; unemployment gap; Unemployment; Labor force participation; Employment; Cyclical unemployment; Women
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The negative and stable relationship between an economy’s aggregate demand conditions and overall unemployment is well-documented. We show that there is a large degree of heterogeneity in the cyclical sensitivities of unemployment across worker and economy groups. First, unemployment is more than twice as sensitive to aggregate demand in advanced as in emerging market and developing economies. Second, youth’s unemployment is twice as sensitive as that of adults’. Third, women’s unemployment is significantly less sensitive to demand than men’s in advanced economies. These findings point to the highly unequal impacts of the business cycle across worker and economy groups.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund