Age- and Gender-Specific Unemployment and Okun’s Law in CEE Countries

Abstract

Unemployment rates, especially youth unemployment rates, have increased in various countries of Europe over the last years. This article examines age- and gender-specific unemployment rates in Central and Eastern European countries by using Okun’s law. It tests the hypothesis that young people are more vulnerable to business cycle fluctuations. Gender- and age-specific Okun coefficients for ten different countries plus the EU-15 are estimated. The results show that young people in the CEE countries are predominantly more sensitive to business cycle fluctuations, independent of gender.

Keywords:

• CEE countries
• gender
• Okun’s law
• youth unemployment

JEL Classification:

• E24
• E32
• C23

ACKNOWLEDGMENTs

A preliminary version of the article was presented at the 6th Ifo Dresden Workshop on Labor Economics and Social Policy at the Ifo Institute Dresden Branch, March 10–11, 2016, and I am grateful for comments by the workshop participants as well as for those by two anonymous referees.

FUNDING

The research underlying this article was supported by the Deutsch-Polnische Wissenschaftsstiftung.

Notes

1. The statistics are weighted averages of the individual EU-15 countries.

2. The GDP growth rate has been calculated as a percentage change in GDP: $GDPgrowt{h}_t=\hspace{0.17em}\left(\frac{GD{P}_t-\hspace{0.17em}GD{P}_{t-1}}{GD{P}_{t-1}}\right)\ast 100$.

Additional information

Funding

The research underlying this article was supported by the Deutsch-Polnische Wissenschaftsstiftung.

Notes on contributors

Sophie Dunsch

Sophie Dunsch is Research Assistant at the Chair of Economics, in particular Economic Theory (Macroeconomics), Faculty of Business and Economics, European University Viadrina, Frankfurt (Oder), Germany.