Article
Hysteresis in Unemployment: Evidence from Latin America
Journal of International Development
(2010)
Abstract
This paper tests the hysteresis hypothesis in unemployment for 13 Latin American countries covering the period 1980–2005. The tests exploit the time series and the cross sectional variation of the series, and allows for cross section dependence and a different number of endogenously determined structural breakpoints. The findings give support to the hysteric dynamic hypothesis for the majority of the countries analysed. The implications of the results have ramifications regarding macro-stabilisation, structural reform, and the design of social safety protection.
Keywords
- Unemployment hysteresis,
- unit root test,
- panel unit root test
Disciplines
Publication Date
Fall October 27, 2010
DOI
http://doi.org/10.1002/jid.1755
Citation Information
Mednik, M., Rodriguez, C. M. and Ruprah, I. J. (2012), Hysteresis in unemployment: Evidence from Latin America. Journal of International Development, 24: 448–466. doi:10.1002/jid.1755