A method for the gender disaggregation of Okun’s law

For the case of a slowly time-varying Okun’s law, the paper proposes a method to identify male and female Okun coefficients based upon the trajectory of the economy-wide Okun coefficient. The method rests upon a disaggregation principle that requires that gender-specific Okun coefficients be in “accounting” agreement with economy-wide Okun coefficients, which is not recognized in conventional applications. Albeit equally applicable also for the difference version of Okun’s law, the method is demonstrated with the more general gap version for the Group of Seven (G7) economies over a period 1991–2022. The demonstration reveals that the conventional approach often leads to implausible trajectories of Okun coefficients and that the unemployment-output nexus for the past three decades did not have constant features. Furthermore, male unemployment need not be universally more exposed to the business cycle, but gender sensitivity may alternate over time with a little difference between males and females. A method to identify gender-specific Okun coefficients for an economy is proposed. The method requires time-varying economy-wide Okun coefficients. The method is usable with both the gap and difference version of Okun’s law. A demonstration for the G7 economies shows that Okun coefficients vary in time. Gender-sensitivity to the business cycle may alternate and may not be universal.