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Okun's law and youth unemployment in Germany and Poland

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  • Dunsch, Sophie

Abstract

The unemployment rates, especially youth unemployment rates, increased in various countries of Europe over the last years. This paper examines youth unemployment developments in Germany and Poland with Okun's law to test the hypothesis that young employees are more exposed to the business cycle. I estimate age and country specific Okun coefficients for five different age cohorts. The results show that youth in Poland is more sensitive to the business cycle than adults, while in Germany the difference between the age cohorts is not that distinctive. A further examination of the different labor market institutions regarding youth employment results in policy recommendations beyond GDP growth, such as job-search assistance as short-term and structural reforms regarding education as long-term recommendation.

Suggested Citation

  • Dunsch, Sophie, 2015. "Okun's law and youth unemployment in Germany and Poland," Discussion Papers 373, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    • Handle: RePEc:zbw:euvwdp:373
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    References listed on IDEAS

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    Cited by:

    1. Robert Dixon & G. C. Lim & Jan C. van Ours, 2017. "Revisiting the Okun relationship," Applied Economics, Taylor & Francis Journals, vol. 49(28), pages 2749-2765, June.

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    More about this item

    Keywords

    Youth Unemployment; Okun's Law; Poland; Germany;
    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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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