This note examines labor market performance across countries through the lens of Okun’s Law. We find that after the 1970s but prior to the global financial crisis of the 2000s, the Okun’s Law relationship between output and unemployment became more homogenous across countries. These changes presumably reflected institutional and technological changes. But, at least in the short term, the global financial crisis undid much of this convergence, in part because the affected countries adopted different labor market policies in response to the global demand shock.
Nechio, Fernanda, John G. Fernald, Mary C. Daly, and Oscar Jorda. 2014. “Labor Markets in the Global Financial Crisis: The Good, the Bad and the Ugly,” Federal Reserve Bank of San Francisco Working Paper 2014-11. Available at https://doi.org/10.24148/wp2014-11