Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Abstract: There is a growing literature studying unemployment dynamics by means of worker flow data between labor market states. This paper contributes to this literature stream by analyzing the dynamics of the Austrian unemployment rate applying novel worker flow data for 2005-2016. Our main results can be summarized along two dimensions: First, we show that worker flows between unemployment and inactivity are major determinants of unemployment fluctuations in Austria. Second, we show for the working-age population that the contribution of male worker flows to the overall variation of the unemployment rate is higher, but that this relation turns when it comes to the youth cohort. The gender differences are probably related to the early occupational and educational segregation of young men and women in Austria. The paper concludes by stressing a strong need for further empirical and theoretical research which aims to link structural differences in an economy with different responses to the business cycle.

Keywords: Worker flows, Unemployment dynamics, Gender, Unemployment gap, Austrian labour market, Youth unemployment

JEL-codes: C81; J21; J63 March 2019

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