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Don’t trust anybody over 30: youth unemployment and Okun’s law in CEE countries

Author

Listed:
  • Oliver Hutengs

    (Europa-Universität Viadrina, Lehrstuhl für Volkswirtschaftslehre, Wirtschaftswissenschaftliche Fakultät, insb. Makroökonomik)

  • Georg Stadtmann

    (University of Southern Denmark, Department of Business and Economics
    Europa-Universität Viadrina, Lehrstuhl für Volkswirtschaftslehre, insb. Makroökonomik)

Abstract

In recent years youth unemployment rates across Europe soared, causing the European Commission to take actions through initiatives to counter this development. This article examines youth unemployment development in selected CEE countries and compares them to the EU-15. We use Okun’s law and estimate age and country specific Okun coefficients for five different age cohorts. Our results show that young people display much higher Okun coefficients than their older peers, thus confirming that young people are more prone to macroeconomic shocks. This result might be a justification for additional governmental intervention and active labour market policies favouring young people.

Suggested Citation

  • Oliver Hutengs & Georg Stadtmann, 2014. "Don’t trust anybody over 30: youth unemployment and Okun’s law in CEE countries," Bank i Kredyt, Narodowy Bank Polski, vol. 45(1), pages 1-16.
    • Handle: RePEc:nbp:nbpbik:v:45:y:2014:i:1:p:1-16
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    References listed on IDEAS

    as
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    9. Edward S. Knotek, 2007. "How useful is Okun's law?," Economic Review, Federal Reserve Bank of Kansas City, vol. 92(Q IV), pages 73-103.
    10. Niall O'Higgins, 1997. "The challenge of youth unemployment," International Social Security Review, John Wiley & Sons, vol. 50(4), pages 63-93, October.
    11. Thomas A. Mroz & Timothy H. Savage, 2006. "The Long-Term Effects of Youth Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
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    13. O. Hutengs & G. Stadtmann, 2013. "Age effects in Okun's law within the Eurozone," Applied Economics Letters, Taylor & Francis Journals, vol. 20(9), pages 821-825, June.
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    Cited by:

    1. Luis René Cáceres, 2021. "Youth Unemployment and Underdevelopment in Honduras," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(2), pages 1-61, February.
    2. Zanin, Luca, 2014. "On Okun’s law in OECD countries: An analysis by age cohorts," Economics Letters, Elsevier, vol. 125(2), pages 243-248.
    3. Albena Vutsova & Martina Arabadzhieva, 2022. "Three Eastern Cases of Youth Unemployment Trends – Bulgaria, Romania, Serbia," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 94-110.
    4. Ousama Ben-Salha & Zouhair Mrabet, 2019. "Is Economic Growth Really Jobless? Empirical Evidence from North Africa," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(4), pages 598-624, December.

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    More about this item

    Keywords

    Okun’s law; labour market; youth unemployment;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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