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Social Indicators Research

Erschienen in:

01.04.2014

Labor-Force Participation Rates and the Informational Value of Unemployment Rates in US: Evidence from Regional Data

verfasst von: De-Chih Liu

Erschienen in: Social Indicators Research | Ausgabe 2/2014

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Abstract

Unemployment rate is an important social indicator for unhappiness. This paper explores the informational value of the United States unemployment rate via examining whether the labor-force participation rate is featured with non-stationary processes from the geographical location perspective. We apply the recently developed flexible Fourier stationarity test proposed by Enders and Lee (Oxf Bull Econ Stat 74:574–599 2012). Our main findings are: (1) when we apply conventional tests, such as the Augmented Dickey–Fuller (ADF), ADF-GLS and KPSS univariate tests, we find little evidence for stationarity; and (2) when we employ the flexible Fourier univariate test with consider of structural breaks, we find evidence of stationarity for 45 out of 51 states. Based on our results, we argue that the unemployment rate alone, without understanding participation behavior, does not provide an overall picture for the melancholy jobless people.

Vorheriger Artikel The Latent Profiles of Life Domain Importance and Satisfaction in a Quality of Life Scale

Nächster Artikel Work Satisfaction of Chinese Employees: A Social Exchange and Gender-Based View

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As pointed out by Nicolau (2002), the participation rate is bounded between zero and one and cannot be a linear unit-root process with an additive error term fulfilling standard assumptions. Following Wallis (1987) we employed a logistic transformation \( (\tilde{p}_{t} = \ln (p_{t} /(1 - p_{t} )) \)and obtained similar results.

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Titel: Labor-Force Participation Rates and the Informational Value of Unemployment Rates in US: Evidence from Regional Data
verfasst von: De-Chih Liu
Publikationsdatum: 01.04.2014
Verlag: Springer Netherlands
Erschienen in: Social Indicators Research / Ausgabe 2/2014
Print ISSN: 0303-8300
Elektronische ISSN: 1573-0921
DOI: https://doi.org/10.1007/s11205-013-0286-y

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