AGE AND GENDER EFFECTS IN OKUN’S LAW: AN EMPIRICAL ANALYSIS FOR THE G7 COUNTRIES

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The consistent empirical relationship between unemployment and economic growth in macroeconomics is called Okun s law. The Okun’s coefficient measures the degree of this relationship. This study aims to estimate age cohorts- and gender-specific Okun’s coefficients for the G7 countries. Findings of the empirical analyses provide evidence for the existence of a stable Okun’s relationship for all countries. It is also empirically proven that in all countries, the Okun’s coefficient varies according to age cohorts and gender. The findings also reveal that the economic cost of unemployment (regarding production) increases with age. According to findings, economic growth has the lowest responsiveness to an increase in the 15-24 cohort unemployment. The shrinking effect of male unemployment on the economy is higher in the United Kingdom, Japan and Italy, whereas it is precisely the opposite in the USA, Canada and Germany.

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Okun’s Law , Unemployment , Economic Growth

Celal Bayar University Journal Of Social Sciences

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Celal Bayar University Journal Of Social Sciences