Unemployment in Latin America and the Caribbean

This study constructs a new data set on unemployment rates in Latin America and the Caribbean and then explores the determinants of unemployment. We compare different countries, finding that unemployment is influenced by the size of the rural population and that the effects of government regulations...

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Bibliographic Details
Published in:Open economies review 2013-07, Vol.24 (3), p.397-424
Main Authors: Ball, Laurence, De Roux, Nicolás, Hofstetter, Marc
Format: Article
Language:English
Subjects:
Aggregate demand
Capital flight
Capital movement
Caribbean
Datasets
Determinants
Development banks
Development Economics
Economic conditions
Economic models
Economic Policy
Economic statistics
Economic theory
Economics
Economics and Finance
European Integration
Exchange rates
International Economics
Labor economics
Latin America
Macroeconomics/Monetary Economics//Financial Economics
Monetary policy
Research Article
Rural areas
Studies
Time series
Unemployment
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Summary:This study constructs a new data set on unemployment rates in Latin America and the Caribbean and then explores the determinants of unemployment. We compare different countries, finding that unemployment is influenced by the size of the rural population and that the effects of government regulations are generally weak. We also examine large, persistent increases in unemployment over time, finding that they are caused by contractions in aggregate demand. These demand contractions result from either disinflationary monetary policy or the defense of an exchange-rate peg in the face of capital flight. Our evidence supports hysteresis theories in which short-run changes in unemployment influence the natural rate.
ISSN:0923-7992
1573-708X
DOI:10.1007/s11079-012-9248-2