Misbah Tanveer Choudhry

Youth unemployment rate and impact of financial crises

Purpose - The purpose of this paper is to assess the impact of financial crises on the youth unemployment rate (YUR). The authors consider different types of financial crises (systemic banking crises, non-systemic banking crises, currency crises and debt crises) and different groups of countries, according to their income level. Design/methodology/approach - After a review of the existing (theoretical and empirical) literature on the determinants of the YUR in general and at the occurrence of economic crises, the authors present empirical estimations on the impact of past financial crises on young workers. The relationship between financial crises and YUR is investigated by employing fixed effects panel estimation on a large panel of countries (about 70) around the world for the period 1980-2005. The “persistence” over time of the impact is also investigated. Finally the Arellano-Bond dynamic panel is estimated, confirming the significance of the results. Findings - According to the authors’ empirical estimates, two key results are relevant: financial crises have an impact on the YUR that goes beyond the impact resulting from GDP changes; and the effect on the YUR is greater than the effect on overall unemployment. The inclusion of many control variables – including in particular GDP growth – does not change the sign and significance of the key explanatory variable. The results suggest that financial crises affect the YUR for five years after the onset of the crises; however, the most adverse effects are found in the second and third year after the financial crisis. Research limitations/implications - Although fully aware of the peculiarities of the last crisis, the authors believe that the econometric results facilitate a better understanding of the impact of the 2007-2008 financial crisis on the youth labour market. Practical implications - The main policy implication is that effective active labour market policies and better school-to-work transition institutions are particularly needed to reduce the risk of persistence and structural (long-term) unemployment, since young people have been worst affected by the last crisis. Originality/value - There are many studies on the characteristics and causes of youth unemployment; considerable research has also been carried out into the labour market impact of financial crises. This paper brings the two strands of literature together, by econometrically investigating the impact of financial crises on YUR.

Youth and total unemployment rate : the impact of policies and institutions.

This paper estimates the impact of several institutions and policies on youth and total unemployment rates for a large set of developed countries during the last three decades. The estimation technique used is a fixed effect panel analysis. Our empirical analysis shows that, in addition to economic growth, economic freedom, labour market reforms, a high share of part time employment, and active labour market policies reduce unemployment and improve labour market performance. Considering the poor condition of young people relative to older people, our results permit us to select, among the policies and reforms that reduce overall unemployment, the policies that have a comparatively high effect on youth unemployment.

Youth Unemployment: Key Determinants and the Impact of Crises

This chapter discusses the impact of various factors on the youth unemployment rate (YUR) with respect to the total unemployment rate. In particular, we use different fixed effect panel models to estimate the role played by macroeconomic and structural conditions (e.g. GDP growth rate, inflation, real interest rate, demographic variables, education), financial crises, institutions and policies (e.g. labour market reforms, ALMPs, overall economic freedom). The econometric analysis is based on a panel of OECD countries for the period 1981–2009. Our empirical analysis confirms the expected role of macroeconomic and structural conditions; it shows the additional effect of financial crises; and it underlines the key importance of various institutions and policies. Most importantly, our results prove the differing magnitudes of the impacts of the above-mentioned factors on youth unemployment with respect to the total unemployment rate. These results have major policy implications also in consideration of the still rising level of youth unemployment, especially in Europe.

Age dependency and labour productivity divergence

ABSTRACT This study finds strong empirical evidence in favour of the hypothesis that the age composition of population matters for labour productivity growth. We applied the fixed effects panel model using data on a large number of countries over the period 1980–2010. Our results suggest that higher age dependency not only directly impacts negatively on labour productivity but also modifies the impact of other determinants of labour productivity. Child dependency has a more adverse effect on labour productivity than old age dependency. We specifically find that the marginal effects of gross capital formation, information and communication improvement, and labour market reforms are significant at lower levels of age dependency. However, the marginal effect of savings on labour productivity is high at a high level of age dependency. The impact of age dependency varies between developed and developing economies. Diversity in the size and nature of age dependency across regions and different income groups help to explain the labour productivity differential across them.

Violence and Economic Empowerment of Women in Pakistan: An Empirical Investigation:

This article empirically investigates whether womens access to economic resources acts as a risk factor or protective factor for spousal (emotional and physical) violence against them, particularly in the case of Pakistan. Using data from Pakistan Demographic and Health Survey (PDHS) 2012 to 2013, we employed logistic regression to investigate this relationship between womens access to economic resources and spousal violence against them by using two indicators: (a) whether she earns money in cash and/or in-kind and (b) whether she owns property. The results indicate that women who earn in cash and/or in-kind face greater violence. Education can reduce the violence against women and family history of violence contributes positively for greater violence. Result also confirms existence of regional disparity in this regard. Based on findings of this study we provide policy suggestions to mitigate the issue of spousal violence against women.

GDP dynamics and unemployment changes in developed and developing countries

ABSTRACT We design a new specification of Okun’s model that takes the following features into account: estimation of the relation in first differences, the possible lagged effect of GDP dynamics on unemployment changes, the persistence of unemployment rate dynamics, the possible different values of Okun coefficients under recession (with respect to periods of increases in GDP), the existence of cross-country institutional and structural differences (i.e. country-specific Okun coefficients), the additional effect on unemployment caused by large adverse shocks such as financial crises. A distinctive feature of this article is its consideration of a large set of countries for which we find differentiated Okun coefficients. Moreover, we focus in particular on the distinction between developed and developing countries, and on the additional impact of financial crises. From an econometric point of view, the model developed belongs in the family of linear mixed-effects models. The estimation method uses an expectation-maximization (EM) algorithm. Our results confirm the general validity of ‘Okun’s law’; they show the Okun coefficient differences between high- and low-income countries; and they evidence an additional impact of some types of financial crisis on the unemployment dynamics of developed economies.