Skip to main content

Table 5 Impact of consolidations on the share of long-term unemployment

From: Fiscal consolidation and unemployment: does EPL matter?: A look at EU countries

 

(1)

(2)

(3)

(4)

 

Action-based fiscal policy variables, 13 EU countries, 1992-2009

“Top-down” fiscal policy variables

Dependent variable: long-term unemployment ratio

Budget balance

Revenue

Expenditure

Change in structural balance

Explanatory variables

Action-based

Action-based

Action-based

 

Long-term unemployment share (1 lag)

0.798**

0.798**

0.798**

0.696**

 

[17.80]

[18.43]

[0.0451]

[16.66]

Fiscal policy variable

0.0367

−0.000789

−0.107

−0.470

 

[0.0668]

[−0.000893]

[−0.868]

[−0.927]

Constant

10.19**

10.25**

10.17**

15.95**

 

[4.715]

[5.097]

[2.157]

[7.397]

Observations

206

206

206

371

R-squared

0.855

0.855

0.855

0.700

Number of countries

13

13

13

27

  1. +, *, ** denote statistical significance at the 10, 5, 1 per cent level respectively. T tests are reported in square brackets.
  2. Specification. All regressions include country and year fixed effects.
  3. Estimation method. Action-based fiscal policy: fixed effect panel OLS. Top-down fiscal policy measures: fixed effect panel instrumental variables (the fiscal policy variable is instrumented with its own lag, the lagged output gap, and the lagged government debt/GDP ratio). Standard errors are robust with respect to hetereoschedasticity and non-independence within country clusters.
  4. Legend. Fiscal variables: see footnote to Table 1.