Labour Markets, Human Resources and Social Policy
Analysis and Estimation of the Structural Unemployment in Germany to Improve the Methods for Evaluation of the Structural Deficit and Potential Output
It is possible to quantify the structural unemployment either on an
aggregate level using the time-series (e.g. estimation of the NAIRU) or on a
more disaggregated level (e.g. regional data for estimation of the mismatch
unemployment). The common problem with the NAIRU is that the estimates are not
robust across different specifications (see Franz 2005). In economic science
there is no consensus over the determinants of the structural unemployment.
Hence, it is advised not to rely solely on the NAIRU but to use alternative
concepts as well. This is the core of our project. The concept of the structural unemployment is not used uniformly in the
academics. In the project we define the structural unemployment as unemployment
free of cyclical components, which contains frictional unemployment but also
unemployment caused by imperfections in wage formation or social security.
Different international organizations report estimates of the structural
unemployment rate. They have an advantage of being comparable across countries.
However, due to standardized methods used for estimation they fail to take into
account the national peculiarities.
Duration: 01.07.2007 - 30.06.2008