IMF Working Papers

Okun's Law, Development, and Demographics: Differences in the Cyclical Sensitivities of Unemployment Across Economy and Worker Groups

By Zidong An, John C Bluedorn, Gabriele Ciminelli

November 12, 2021

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Zidong An, John C Bluedorn, and Gabriele Ciminelli. Okun's Law, Development, and Demographics: Differences in the Cyclical Sensitivities of Unemployment Across Economy and Worker Groups, (USA: International Monetary Fund, 2021) accessed October 11, 2024

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Summary

The negative and stable relationship between an economy’s aggregate demand conditions and overall unemployment is well-documented. We show that there is a large degree of heterogeneity in the cyclical sensitivities of unemployment across worker and economy groups. First, unemployment is more than twice as sensitive to aggregate demand in advanced as in emerging market and developing economies. Second, youth’s unemployment is twice as sensitive as that of adults’. Third, women’s unemployment is significantly less sensitive to demand than men’s in advanced economies. These findings point to the highly unequal impacts of the business cycle across worker and economy groups.

Subject: Cyclical unemployment, Employment, Gender, Labor, Labor force participation, Unemployment, Women

Keywords: Business cycles, Cyclical sensitivities of unemployment, Cyclical unemployment, Demographics, Economy group, Employment, Labor force participation, Okun’s Law, Unemployment, Unemployment, Unemployment across economy, Unemployment gap, Women, Women's unemployment

Publication Details

  • Pages:

    22

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2021/270

  • Stock No:

    WPIEA2021270

  • ISBN:

    9781616356040

  • ISSN:

    1018-5941