Structural rate of unemployment, hysteresis, human capital, and macroeconomic data

The relationship between the unemployment rate and the evolution of human capital is different depending on whether one subscribes to a neoclassical logic or to a hysteresis theory. This paper proposes that when the unemployment rate reaches a high level for some time, the persistence phenomenon, or hysteresis, weakens the attractive forces of the natural rate of unemployment. The unemployment rate can then reach a different equilibrium value. However, according to Blanchard and Summers, this equilibrium is unstable and fragile. In the second part of this paper, we propose an indicator to measure the intensity of the attraction forces of the natural rate of unemployment. The empirical values of this index show the weak attraction forces of the natural rate of unemployment in economies with high levels of long-term unemployment.