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 high-unemployment regimes. The findings highlight the importance of accounting for asymmetries in labor market adjustments.