Unemployment Dynamics in the United Kingdom: a Quarter-Millennium Perspective

Abstract

This letter examines the persistence of unemployment in the United Kingdom (UK) using over a quarter of a millennium of data, spanning from 1760 to 2023. The results from the quantile unit root approach-accounting for non-normal distributions, structural changes, and non-linearity-reveal asymmetric unemployment dynamics. Shocks to unemployment appear transitory in low-unemployment regimes but are persistent in highunemployment regimes. The findings highlight the importance of accounting for asymmetries in labor market adjustments.