THE UNEMPLOYMENT INVARIANCE HYPOTHESIS: DOES THE GENDER MATTER?

This paper examines the unemployment invariance hypothesis by exploring the importance of labor force, capital stock change and productivity in unemployment determination in OECD (Organization for Economic Co-operation and Development) countries. Using the cross-sectional distributed lag (CS-DL) approach this study shows that aggregate unemployment-labor force participation linkage is not significant in OECD counties. Moreover, the result shows that capital stock change is a crucial determinant in male rather than female unemployment. These findings lead to questioning the empirical relevance of the unemployment invariance hypothesis. This article provides potentially valuable insights into the labor market inequality in OECD countries and has important policy implications.