The heterogeneity of Okun's law: A metaregression analysis

Producción CientíficaOkun's law, a significant parameter in empirical research and policy analysis, faces considerable heterogeneity. This stems from its dual interpretation in the literature, with one implying unemployment's effects on output and the other suggesting output's effects on unemployment. Consequently, comparing results from these approaches is not straightforward. Even within each approach, variability persists. Through meta-analysis and correction for publication bias, we identified the primary factor contributing to heterogeneity in both approaches: labor market characteristics (e.g., self-employment, labor laws, productive structure), leading to varying reactions of unemployment to cyclical output changes across different labor markets. The second most influential factor was methodological issues (data type, frequency, spatial coverage, sample period, etc.), highlighting how researchers' decisions impact results. Lastly, the underlying theoretical model also accounted for some variability. Okun proposed three models to estimate the relationship, which yielded comparable results for the US economy, but for other economies this was less evident.Ministerio de Ciencia e Innovación (PID2020-112509 GB-I00

Ley de Okun: los efectos de la pandemia de COVID-19 y los procedimientos de despido temporal (ERTE) en las regiones españolas

Official statistics indicated a break in Okun’s law in all the Spanish regions due to the COVID-19 pandemic; however, herein, evidence of the validity of the law is shown. The temporary layoff procedures (ERTEs) allowed many workers to maintain their jobs. From the productive point of view, the law remained in effect in the regions, showing a strong relationship between idle labour resources and economic activity, and from the social point of view, the apparent breakdown of the law can be interpreted as the implementation of a policy that mitigated the dramatic impact of the economic crisisLas estadísticas oficiales indicaban una ruptura de la ley de Okun en todas las CCAA por la pandemia del COVID-19, sin embargo, aquí se muestra evidencia sobre la vigencia de la ley. Los ERTE permitieron el mantenimiento del vínculo laboral de muchos trabajadores. Desde el punto de vista productivo se observa que la ley continuó vigente mostrando una fuerte relación entre los recursos laborales ociosos y la actividad económica, y, desde el punto de vista social, la aparente ruptura de la ley puede interpretarse como la implementación de una política que mitigó el dramático impacto de la crisis económic

Okun’s Law: The effects of the COVID-19 pandemic and the temporary layoffs procedures (ERTE) on Spanish regions

Official statistics indicated a break in Okun’s law in all the Spanish regions due to the COVID-19 pandemic; however, herein, evidence of the validity of the law is shown. The temporary layoff procedures (ERTE) allowed many workers to maintain their jobs. From the productive point of view, the law remained in effect in the regions, showing a strong relationship between idle labour resources and economic activity, and from the social point of view, the apparent breakdown of the law can be interpreted as the implementation of a policy that mitigated the dramatic impact of the economic crisis