IESET.
Hypotheses·labour·labour_market_hysteresis_persistent_unemployment

Blanchard-Summers hysteresis: prolonged high unemployment (European NAIRU rise post-1980s, post-2008 Southern Europe) produces persistent labour-force detachment and skill decay that raises the natural rate.

REFUTEDengine/runs/labour_market_hysteresis_persistent_unemployment

REFUTED — sign - OPPOSITE claim +, cumulative_effect=-1.909, h=5, p_h=0.000683

confidence cueThis test cuts against the claim as written or misses its pre-declared threshold.

policy briefNeeds review

In ordinary language

In plain terms, this asks whether unemployment rate is actually linked to better or worse nairu estimate from 1980 to 2017.

plain answer

The data did not support the prediction. sign - OPPOSITE claim +, cumulative_effect=-1.909, h=5, p_h=0.000683

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 15 country or place units from 1980 to 2017, using a local projections design, with fixed effects for country and year.

what was measured
What changed
  • Unemployment rate
  • Recession shock indicator
What we checked
  • Nairu estimate
  • Long term unemployment rate
  • Labour force participation rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/labour_market_hysteresis_persistent_unemployment
1007550250198019992017GRCITAESPPRTIRLFRADEU
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show nairu_estimate across 15 sampled countries over 1980–2017.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_market_hysteresis_persistent_unemployment. Published chart will be generated from engine/runs/labour_market_hysteresis_persistent_unemployment/chart_data.json.

Who has skin in the game — schools predicting on this

1 school list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

New Keynesian (mainstream synthesis)wins if SUPPORTEDschool refuted

Pre-registration

pre-registered
first-spec commit bae09ab · 2026-04-29T22:09:42Z
run generated · 2026-04-30T15:04:38Z

Blanchard-Summers hysteresis: prolonged high unemployment (European NAIRU rise post-1980s, post-2008 Southern Europe) produces persistent labour-force detachment and skill decay that raises the natural rate.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

The hypothesis is falsified if the preregistered empirical test shows the opposite direction of the claim at conventional significance (p < 0.05), or if the primary outcome measure does not move in the claimed direction.

formal test & threshold
test:      labour_market_hysteresis_persistent_unemployment_placeholder_test

Method

Template
local_projections
Fixed effects
country, year
Clustering
country
Sample
15 countries · 1980 – 2017
Evidence type
associational

Local projections of NAIRU and labour-force participation on unemployment-recession shocks across OECD panel post-2008. Tests Blanchard-Summers hysteresis prediction that prolonged high unemployment raises long-run NAIRU.

Data

VariableSourceTransform
nairu_estimate
outcome
imf:NAIRUtier 2
level
long_term_unemployment_rate
outcome
oecd:OECD.ELS.EMPtier 2
level
labour_force_participation_rate
outcome
world_bank_wdi:SL.TLF.CACT.ZStier 2
level
unemployment_rate
treatment
world_bank_wdi:SL.UEM.TOTL.ZStier 2
level
recession_shock_indicator
treatment
derived:recession_shock_windowtier 4
indicator
epl_overall_index
control
oecd:OECD.ELS.EMPtier 2
level
union_density
control
oecd:OECD.ELS.SAEtier 2
level
gdp_per_capita_ppp
control
world_bank_wdi:NY.GDP.PCAP.PP.KDtier 2
log
real_interest_rate
control
world_bank_wdi:FR.INR.RINRtier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_market_hysteresis_persistent_unemployment

Verdict: REFUTED — sign - OPPOSITE claim +, cumulative_effect=-1.909, h=5, p_h=0.000683

Pre-registration

  • Claim: Blanchard-Summers hysteresis: prolonged high unemployment (European NAIRU rise post-1980s, post-2008 Southern Europe) produces persistent labour-force detachment and skill decay that raises the natural rate.
  • Falsification rule: The hypothesis is considered falsified if the pre-registered empirical test shows the opposite direction of the claim at conventional significance (p > 0.10), or if the primary outcome measure moves less than 10% in the claimed direction across the sample. Exact thresholds will be pinned in the variables and estimator blocks when this stub is promoted from draft.

Local-projections IRF

  • Method: Jordà local projections (TWFE, country-clustered)
  • Cumulative effect: -1.909
  • Final-horizon p-value: 0.000683

| h | β | SE | p | n | |---|---|---|---|---| | 0 | -0.2194 | 0.0284 | 1.12e-14 | 133 | | 1 | -0.2768 | 0.0665 | 3.18e-05 | 127 | | 2 | -0.3154 | 0.0944 | 0.000839 | 121 | | 3 | -0.3591 | 0.111 | 0.00127 | 115 | | 4 | -0.377 | 0.115 | 0.00107 | 109 | | 5 | -0.3616 | 0.106 | 0.000683 | 103 |

Variables resolved

  • world_bank_wdi:SL.TLF.CACT.ZS → labour_force_participation_rate (outcome, n=8302)
  • world_bank_wdi:SL.UEM.TOTL.ZS → unemployment_rate (treatment, n=8071)
  • world_bank_wdi:NY.GDP.PCAP.PP.KD → gdp_per_capita_ppp (controls, n=8325)
  • world_bank_wdi:FR.INR.RINR → real_interest_rate (controls, n=4694)

Generated by scripts/run_local_projections.py at 2026-04-30T15:04:38+00:00

Notes

Stub seeded from a New-Keynesian school prediction about Blanchard-Summers hysteresis raising the NAIRU via skill decay and labour-force detachment. NAIRU estimation methodology is itself contested; needs human review of identification.

Authored framework. Read the transparency note.