Unemployment hysteresis analysis for OECD countries

Unemployment is one of the main problems of many developed and developing countries. The two concepts used to examine the structure of unemployment are unemployment hysteresis and natural unemployment rate. The aim of this study is to investigate the validity of the unemployment hysteresis in 32 OECD countries for the period January 2005 - July 2017. The nonlinear unit root test by Kruse (2011) and the test by Guris (2018) that take into consideration structural breaks and nonlinearity were used in the analyses. The findings indicate that the unemployment hysteresis in the OECD countries is generally valid according to both test results.