Is there a stable long-run relationship between unemployment and productivity?

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This paper assesses whether productivity and unemployment have a stable long-run relationship. We explore a panel of 19 OECD countries between 1970 and 2012 and rely on recently developed time series econometric methods. Our findings suggest that unemployment and productivity are non-stationary in levels and in many individual cases these series are cointegrated, even after accounting for possible structural breaks. For many individual countries the long-run effect seems to be generally positive. There is also evidence of two-way causality, but the stronger directional relationship runs from unemployment to productivity.

Original languageEnglish
Pages (from-to)57-75
Number of pages19
JournalComparative Economic Research
Issue number2
Publication statusPublished - 1 Jun 2015


  • Cointegration
  • DOLS
  • Granger causality
  • Stationarity
  • Structural breaks


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