{
  "title": "New Evidenceon Cyclical and Structural Sources of Unemployment",
  "publication": "IMF Working Papers, May 1, 2011",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832/index.md",
  "summary": "We provide cross-country evidence on the relative importance of cyclical and structural factors in explaining unemployment, including the sharp rise in U.S. long-term unemployment during the Great Recession of 2007-09.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Cross-country evidence on the relative importance of cyclical and structural factors in explaining unemployment, including the sharp rise in U.S. long-term unemployment during the Great Recession of 2007-09.\n- About 75% of the forecast error variance of unemployment is accounted for by cyclical factors—real GDP changes (?Okun‘s Law?), monetary and fiscal policies, and the uncertainty effects emphasized by Bloom (2009).\n- Structural factors, measured using the dispersion of industry-level stock returns, account for the remaining 25 percent.\n- For U.S. long-term unemployment the split between cyclical and structural factors is closer to 60-40, including during the Great Recession."
    },
    {
      "heading": "Key findings and statistics",
      "content": "- 75%: Share of forecast error variance of unemployment attributed to cyclical factors (real GDP changes, monetary and fiscal policies, uncertainty effects).\n- 25%: Share of forecast error variance of unemployment attributed to structural factors (measured by dispersion of industry-level stock returns).\n- 60-40: Approximate cyclical-structural split for U.S. long-term unemployment, including during the Great Recession of 2007-09."
    },
    {
      "heading": "Methodology and measures",
      "content": "- Cyclical factors: real GDP changes (Okun‘s Law), monetary policy, fiscal policy, and uncertainty effects (as emphasized by Bloom (2009)).\n- Structural factors: proxied by the dispersion of industry-level stock returns (referred to as a dispersion or stock market dispersion index)."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subjects: Asset prices, Financial markets, Labor, Prices, Stock markets, Structural unemployment, Unemployment, Unemployment rate.\n- Keywords: aggregate unemployment equation, Asset prices, dispersion index, Dispersion shock, employment dispersion, index result, long-term unemployment, stock market dispersion index, stock markets, structural unemployment, structural unemployment rate, uncertainty, uncertainty index, unemployment, unemployment duration, unemployment fluctuation, Unemployment rate, unemployment rate shock, WP."
    },
    {
      "heading": "Publication and authorship (from the content)",
      "content": "- By Jinzhu Chen, Bharat Trehan, Prakash Kannan, Prakash Loungani\n- May 1, 2011\n- Working Paper No. 2011/106\n- Pages: 42\n- DOI: https://doi.org/10.5089/9781455260416.001\n\nIMF Working Paper: \"New Evidenceon Cyclical and Structural Sources of Unemployment\" (Jinzhu Chen, Bharat Trehan, Prakash Kannan, Prakash Loungani, May 1, 2011).\n\n---\n\n Content in this bundle\n\n- Wp11106\n  - Wp11106 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp11106 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832/bundle-manifest.json)",
    "Authors: Jinzhu Chen, Bharat Trehan, Prakash Kannan, Prakash Loungani",
    "Published: May 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455260416.001",
    "Cross-country evidence on the relative importance of cyclical and structural factors in explaining unemployment, including the sharp rise in U.S. long-term unemployment during the Great Recession of 2007-09.",
    "About 75% of the forecast error variance of unemployment is accounted for by cyclical factors—real GDP changes (?Okun‘s Law?), monetary and fiscal policies, and the uncertainty effects emphasized by Bloom (2009).",
    "Structural factors, measured using the dispersion of industry-level stock returns, account for the remaining 25 percent.",
    "For U.S. long-term unemployment the split between cyclical and structural factors is closer to 60-40, including during the Great Recession.",
    "75%: Share of forecast error variance of unemployment attributed to cyclical factors (real GDP changes, monetary and fiscal policies, uncertainty effects).",
    "25%: Share of forecast error variance of unemployment attributed to structural factors (measured by dispersion of industry-level stock returns).",
    "60-40: Approximate cyclical-structural split for U.S. long-term unemployment, including during the Great Recession of 2007-09.",
    "Cyclical factors: real GDP changes (Okun‘s Law), monetary policy, fiscal policy, and uncertainty effects (as emphasized by Bloom (2009)).",
    "Structural factors: proxied by the dispersion of industry-level stock returns (referred to as a dispersion or stock market dispersion index).",
    "Subjects: Asset prices, Financial markets, Labor, Prices, Stock markets, Structural unemployment, Unemployment, Unemployment rate.",
    "Keywords: aggregate unemployment equation, Asset prices, dispersion index, Dispersion shock, employment dispersion, index result, long-term unemployment, stock market dispersion index, stock markets, structural unemployment, structural unemployment rate, uncertainty, uncertainty index, unemployment, unemployment duration, unemployment fluctuation, Unemployment rate, unemployment rate shock, WP.",
    "By Jinzhu Chen, Bharat Trehan, Prakash Kannan, Prakash Loungani",
    "May 1, 2011",
    "Working Paper No. 2011/106",
    "Pages: 42",
    "DOI: https://doi.org/10.5089/9781455260416.001",
    "**Wp11106**"
  ],
  "related": [
    {
      "title": "Wp11106",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11106.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11106.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2011/_wp11106.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/new-evidenceon-cyclical-and-structural-sources-of-unemployment-24832/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T18:31:56.659Z"
}