The Ins and Outs of Icelandic Unemployment
This paper presents new data on Icelandic labour market flows between employment, unemployment, and inactivity, constructed from the microdata in Statistics Iceland‘s Labour Force Survey (LFS). An analysis of the contribution of the transition rates to the dynamics of unemployment is then performed....
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Institute of Business Research
2016
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fticelandunivojs:oai:ojs.hi.is:article/2202 2023-05-15T16:47:12+02:00 The Ins and Outs of Icelandic Unemployment Einarsson, Bjarni G. 2016-06-15 application/pdf http://www.efnahagsmal.is/article/view/a.2016.13.1.1 https://doi.org/10.24122/tve.a.2016.13.1.1 eng eng Institute of Business Research http://www.efnahagsmal.is/article/view/a.2016.13.1.1/pdf http://www.efnahagsmal.is/article/view/a.2016.13.1.1 doi:10.24122/tve.a.2016.13.1.1 ##submission.copyrightStatement## Research in applied business and economics; Árg. 13, Nr 1 (2016); 59-74 Tímarit um viðskipti og efnahagsmál; Árg. 13, Nr 1 (2016); 59-74 1670-4851 1670-4444 Gross worker flows unemployment dynamics job finding rate job separation rate transition probabilities Iceland E24 J21 J60 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion 2016 fticelandunivojs https://doi.org/10.24122/tve.a.2016.13.1.1 2022-09-21T13:40:37Z This paper presents new data on Icelandic labour market flows between employment, unemployment, and inactivity, constructed from the microdata in Statistics Iceland‘s Labour Force Survey (LFS). An analysis of the contribution of the transition rates to the dynamics of unemployment is then performed. Assuming a fixed labour force yields results comparable to previous estimates in Iceland, with a third of the variation in steady-state unemployment explained by the job finding rate, a significant departure from what is found in Anglo-Saxon, continental European, and Nordic economies. Taking account of movements in and out of the labour force has a significant effect on contributions of transition rates to variations in steady-state unemployment, with inactivity transitions accounting for roughly a third of the variability in steady-state unemployment and a dead-even split of the remaining two-thirds between the employment-unemployment and unemployment-employment transition rates. This contribution of inactivity transitions is comparable to that in the UK, US, and Spain. The background information available in the LFS indicates that some heterogeneity exists in the contributions by gender. The participation margin is thus an important source of variation in unemployment and needs to be accounted for to fully understand the drivers of Icelandic labour market fluctuations. Furthermore, ignoring transitions in and out of the labour force generates misleading results on the relative importance of the transition rates between employment and unemployment states in Iceland. Article in Journal/Newspaper Iceland University of Iceland: Peer Reviewed Journals Tímarit um viðskipti og efnahagsmál 13 1 59 |
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University of Iceland: Peer Reviewed Journals |
op_collection_id |
fticelandunivojs |
language |
English |
topic |
Gross worker flows unemployment dynamics job finding rate job separation rate transition probabilities Iceland E24 J21 J60 |
spellingShingle |
Gross worker flows unemployment dynamics job finding rate job separation rate transition probabilities Iceland E24 J21 J60 Einarsson, Bjarni G. The Ins and Outs of Icelandic Unemployment |
topic_facet |
Gross worker flows unemployment dynamics job finding rate job separation rate transition probabilities Iceland E24 J21 J60 |
description |
This paper presents new data on Icelandic labour market flows between employment, unemployment, and inactivity, constructed from the microdata in Statistics Iceland‘s Labour Force Survey (LFS). An analysis of the contribution of the transition rates to the dynamics of unemployment is then performed. Assuming a fixed labour force yields results comparable to previous estimates in Iceland, with a third of the variation in steady-state unemployment explained by the job finding rate, a significant departure from what is found in Anglo-Saxon, continental European, and Nordic economies. Taking account of movements in and out of the labour force has a significant effect on contributions of transition rates to variations in steady-state unemployment, with inactivity transitions accounting for roughly a third of the variability in steady-state unemployment and a dead-even split of the remaining two-thirds between the employment-unemployment and unemployment-employment transition rates. This contribution of inactivity transitions is comparable to that in the UK, US, and Spain. The background information available in the LFS indicates that some heterogeneity exists in the contributions by gender. The participation margin is thus an important source of variation in unemployment and needs to be accounted for to fully understand the drivers of Icelandic labour market fluctuations. Furthermore, ignoring transitions in and out of the labour force generates misleading results on the relative importance of the transition rates between employment and unemployment states in Iceland. |
format |
Article in Journal/Newspaper |
author |
Einarsson, Bjarni G. |
author_facet |
Einarsson, Bjarni G. |
author_sort |
Einarsson, Bjarni G. |
title |
The Ins and Outs of Icelandic Unemployment |
title_short |
The Ins and Outs of Icelandic Unemployment |
title_full |
The Ins and Outs of Icelandic Unemployment |
title_fullStr |
The Ins and Outs of Icelandic Unemployment |
title_full_unstemmed |
The Ins and Outs of Icelandic Unemployment |
title_sort |
ins and outs of icelandic unemployment |
publisher |
Institute of Business Research |
publishDate |
2016 |
url |
http://www.efnahagsmal.is/article/view/a.2016.13.1.1 https://doi.org/10.24122/tve.a.2016.13.1.1 |
genre |
Iceland |
genre_facet |
Iceland |
op_source |
Research in applied business and economics; Árg. 13, Nr 1 (2016); 59-74 Tímarit um viðskipti og efnahagsmál; Árg. 13, Nr 1 (2016); 59-74 1670-4851 1670-4444 |
op_relation |
http://www.efnahagsmal.is/article/view/a.2016.13.1.1/pdf http://www.efnahagsmal.is/article/view/a.2016.13.1.1 doi:10.24122/tve.a.2016.13.1.1 |
op_rights |
##submission.copyrightStatement## |
op_doi |
https://doi.org/10.24122/tve.a.2016.13.1.1 |
container_title |
Tímarit um viðskipti og efnahagsmál |
container_volume |
13 |
container_issue |
1 |
container_start_page |
59 |
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1766037288448425984 |