Friday, May 5, 2017

Dynamic equilibrium in employment-population ratio in OECD countries

John Handley asks on Twitter about whether the dynamic equilibrium model works for the unemployment-population ratio for other countries besides the US. So I re-ran the model on some of the shorter OECD time series available on FRED (most of them were short, and I could easily automate the procedure for time series of approximately the same length).

As with the US, some countries seem to be undergoing a "demographic transition" with women entering the workforce. Therefore most of the data sets are for men only. I just realized that I actually have both for Greece. These are all for 15-64 year olds, and cases where there was data for at least 2000-2017. Some of the series only go back to 2004 or 2005, which is really too short to be conclusive. I also left off the longer time series (to come later in an update) because it was easy to automate the model for time series of approximately the same length.

Anyway, the men-only model country list is: Denmark, Estonia, Greece, Ireland, Iceland, Italy, New Zealand, Portugal, Slovenia, Turkey, and South Africa. The men and women are included for: France, Greece (again), Poland, and Sweden. I searched FRED manually, so these are just the countries that came up.

Here are the results (some have 1 shock, some have 2):

What is interesting is that while the global financial crisis seems to often be conflated with the Greek debt crisis, the Greek debt crisis appears to hit much later (centered at 2011.2). For example, the recession in Iceland is centered at 2008.7 (about 2.5 years earlier, closer to the recession center for the US).



Here are the results for Australia, Canada, and Japan which have longer time series:

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