Social Indicators Research

, Volume 142, Issue 3, pp 1211–1229 | Cite as

Testing Hysteresis in Unemployment in G7 Countries Using Quantile Unit Root Test with both Sharp Shifts and Smooth Breaks

  • Yushi Jiang
  • Yifei Cai
  • Yi-Ting Peng
  • Tsangyao ChangEmail author


We apply a Quantile unit root test with both Sharp Shifts and Smooth Breaks to revisit hysteresis in unemployment for G7 countries using data for the period 1980–2017. Results from the conventional unit root tests indicate that hysteresis in unemployment does hold in half of these G7 countries during the period 1980–2017. A quantile Kolmogorov–Smirnov test fails to reject hysteresis in the unemployment hypothesis for our quarterly data but not in monthly data in G7 countries. Empirical results from our proposed quantile unit root test considering both sharp shifts and smooth breaks indicate that hysteresis in unemployment can be rejected over certain quantiles. A quantile Kolmogorov–Smirnov test results demonstrating hysteresis in unemployment does not hold in G7 countries for both monthly and quarterly data. These empirical findings have important policy implications in G7 countries.


Quantile unit root test Hysteresis Unemployment Sharp shifts and smooth breaks 

JEL Classification

C12 C22 E24 



The first author, Yushi Jiang acknowledges financial support from National Natural Science Foundation of China in 2014. No: 71572156. The second Author, Yifei Cai acknowledges the support of “ University Postgraduate Award (UPA) and an Australian Government Research Training Program Scholarship (RTP)” at The University of Western Australia.


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Copyright information

© Springer Nature B.V. 2018

Authors and Affiliations

  • Yushi Jiang
    • 1
  • Yifei Cai
    • 2
  • Yi-Ting Peng
    • 3
  • Tsangyao Chang
    • 4
    • 5
    Email author
  1. 1.School of Economics & ManagementSouthwest Jiaotong UniversityChengduChina
  2. 2.Economics, Business SchoolThe University of Western AustraliaPerthAustralia
  3. 3.Department of AccountingChaoyang University of TechnologyTaichungTaiwan
  4. 4.Department of FinanceFeng Chia UniversityTaichungTaiwan
  5. 5.School of FinanceHubei University of EconomicsWuhanChina

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