phk
phknrocket1k
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Posts: 12,906
Political Matrix
E: 1.42, S: -1.22
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« on: May 24, 2010, 01:12:38 PM » |
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« edited: May 24, 2010, 01:14:58 PM by phknrocket1k »
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This is exclusively for OECD members.
The correlation between potential workers and jobs in the OECD is 0.99!
I have also done the same plot without the U.S and Japan so you can see the individual countries better.
There is no statistically significant relationship between the typical workday and unemployment rate (p value 0.52). Countries that have reduces the average hours worked have not been able to achieve lower unemployment rate. Now, correlation is not always causation. Maybe the unemployment rate in France would have been even higher if they worked more hours. But I strongly doubt it.
To an economist this is trivial, and just says that there is no connection between employment rate and country size among the OECD countries. But savor the pictures for a moment. They have a profound implication. It means that there are extremely powerful forces in market economies that create jobs for ordinary people, no matter how many people we have, and regardless of if we can perfectly understand these forces.
The problems that cause unemployment is never the number of people, it is things like the skill composition combined with wage rigidity, cyclical demand conditions, search friction, taxes and regulations, and market imperfections. None of the core economic forces that create unemployment is affected by permanent work sharing for all workers.
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