A Bayesian approach to determine the impact of institutions on the unemployment rate

Arbeitspapier

Labor and product market regulations affect the unemployment rate of a country without doubt. Econometricians, however, have yet to establish an unequivocal significance of this impact. Model mis-specification, one of the main underlying problems, is overcome by adopting a Bayesian Model Averaging approach. I apply this method to a panel data set that covers 17 OECD countries for the time period from 1982 to 2005 and for up to 20 potential explanatory variables. 8 institutional indicators are identified as significant determinants of unemployment. Endogeneity due to reverse causality is also considered by applying an instrumental variable estimation approach.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 10-058

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Institutions and the Macroeconomy ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
• Subject: unemployment ; institutions ; labor and product markets ; model averaging ; Arbeitslosigkeit ; Arbeitsmarktflexibilisierung ; Regulierung ; Institutionalismus ; Panel ; Modell-Spezifikation ; Bayes-Statistik ; Schätzung ; OECD-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sachs, Andreas
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/40159
• Last update: 10.03.2025, 11:42 AM CET