Hysteresis fakta eller fiktion - en studie om arbetslöshet i Sverige
Hysteresis fact or fiction - a study of unemployment in Sweden
Hysteresis is an often discussed phenomenon in the field of labor economics. Hysteresis is theoretically defined as a temporary decline in labor demand, which lingers and creates a permanent higher rate of unemployment. To examine whether there is hysteresis in the Swedish labor market, the study applies several unit root tests to test for stationarity. Swedish unemployment is shown to not have any signs of hysteresis when we allow for an abrupt change in the equilibrium unemployment. This indicates that unemployment will not return to the low level in the decades before the crisis of the 1990s without a change in external factors, and that the equilibrium unemployment has likely changed. On the other hand, if we do not allow for a structural shift in unemployment, we find only very weak evidence that hysteresis can be rejected during the period 1970-2020. During the shorter periods, it is shown that stationarity around a constant holds, while the results for stationarity around a trend vary depending on the selected time period.