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.
Bundesministerium der Finanzen
01.07.2007 - 30.06.2008