State of Persistence: Unemployment Hysteresis in Ten U.S. States: Bootstrap Nonlinear Unit Root Tests in Regional Labor Markets

Authors

  • Ayca Doganer East Texas A&M University
  • Asli Ogunc East Texas A&M University

Keywords:

business, economics, unemployment hysteresis, nonlinear unit root tests, bootstrap methods, state-level labor markets, regional unemployment, persistence, labor market dynamics, macroeconomic shocks, asymmetric adjustment, time series analysis

Abstract

This study examines the extent to which the hypothesis of hysteresis holds across different U.S. states by analyzing unemployment data. Implementing advanced nonlinear unit root tests, in combination with bootstrap techniques, the analysis investigates whether temporary shocks—such as recessions or the COVID-19 pandemic—can result in permanent changes in unemployment and other labor market outcomes.

Our results reveal mixed outcomes consistent with recent literature on the hysteresis hypothesis in the U.S. The LNV and Sollis tests generally support the natural rate hypothesis. In contrast, the KSS and Kruse tests provide evidence of permanent effects in several states.

Downloads

Published

2025-08-08

How to Cite

Doganer, A., & Ogunc, A. (2025). State of Persistence: Unemployment Hysteresis in Ten U.S. States: Bootstrap Nonlinear Unit Root Tests in Regional Labor Markets. Journal of Applied Business and Economics, 27(4). Retrieved from https://articlearchives.co/index.php/JABE/article/view/7356

Issue

Vol. 27 No. 4 (2025)

Section

Articles