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What really drives unemployment? A bayesian approach to determine the impact of institutions on the unemployment rate

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  • Andreas Sachs

    (Centre for European Economic Research)

Abstract

Labor and product market regulations affect the unemployment rate without a doubt. Econometricians, however, have yet to establish an unequivocal significance of this impact. The bayesian model averaging approach applied in this paper permits to unambiguously identify institutional indicators related to unemployment. For a panel of 17 countries, 24 years, and 19 institutional variables, eight indicators are identified as robust and significant determinants of unemployment, while the remaining eleven indicators are not related to the unemployment rate.

Suggested Citation

  • Andreas Sachs, 2012. "What really drives unemployment? A bayesian approach to determine the impact of institutions on the unemployment rate," Economics Bulletin, AccessEcon, vol. 32(1), pages 1008-1019.
    • Handle: RePEc:ebl:ecbull:eb-12-00144
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    References listed on IDEAS

    as
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    Cited by:

    1. Sachs, Andreas & Schleer, Frauke, 2019. "Labor Market Performance in OECD Countries: The Role of Institutional Interdependencies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 33(3), pages 431-454.
    2. Sachs Andreas & Smolny Werner, 2015. "Youth Unemployment in the OECD: The Role of Institutions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 403-417, August.
    3. Juan González Alegre, 2017. "The Efficiency of Active Labour Market Policies in the European Union: Does It Make Sense Increasing the Bill?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 67(3), pages 333-357, September.
    4. Harald Oberhofer & Christian Glocker & Werner Hölzl & Peter Huber & Serguei Kaniovski & Klaus Nowotny & Michael Pfaffermayr & Monique Ebell & Nikolaos Kontogiannis, 2016. "Single Market Transmission Mechanisms Before, During and After the 2008-09 Crisis. A Quantitative Assessment," WIFO Studies, WIFO, number 59156, January.
    5. Peter Huber, 2015. "What Institutions Help Immigrants Integrate? WWWforEurope Working Paper No. 77," WIFO Studies, WIFO, number 57884, January.

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    More about this item

    Keywords

    Unemployment; Labor Market Institutions; Product Market Institutions; Bayesian Model Averaging; Model Averaging;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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