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Don't trust anybody over 30: Youth unemployment and Okun's law in CEE countries

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  • Hutengs, Oliver
  • Stadtmann, Georg

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

  • Hutengs, Oliver & Stadtmann, Georg, 2013. "Don't trust anybody over 30: Youth unemployment and Okun's law in CEE countries," Discussion Papers 333, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    • Handle: RePEc:zbw:euvwdp:333
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    References listed on IDEAS

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    1. Davide Furceri & Aleksandra Zdzienicka, 2011. "The real effect of financial crises in the European transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(1), pages 1-25, January.
    2. 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.
    3. David N. F. Bell & David G. Blanchflower, 2011. "Young people and the Great Recession," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(2), pages 241-267.
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    Cited by:

    1. Samuel Chingoiro & Robert P. Machera & Strike Mbulawa, 2022. "Youth Unemployment And Economic Growth In Sadc Countries: An Application Of Okun’S Law Using Panel Data," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(50), pages 51-61, April.
    2. KARGI, Bilal, 2014. "Okun’s Law and Long Term Co-Integration Analysis for OECD Countries (1987-2012)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 119, pages 77-85.

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    More about this item

    Keywords

    Okun's law; labor 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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