The structure of unemployment

We test for a unit root in postwar unemployment rates for sixteen OECD coun tries. When a one-time structural break is incorporated, the unit root hypo thesis can be rejected for most of the countries and the measured persisten ce of unemployment falls dramatically. We then test for multiple structural changes and find evidence of one or two breaks for those countries for whi ch the unit root hypothesis could be rejected. Almost all of the breaks are positive, reflecting the sustained rise in European unemployment. The majo r exception is the United States, where long-term unemployment rose in the 1970s and fell in the 1980s.