Unemployment in Latin America and the Caribbean

By Laurence M. Ball, Nicolas de Roux Uribe, Marc Hofstetter

November 1, 2011

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Format: Chicago

Laurence M. Ball, Nicolas de Roux Uribe, and Marc Hofstetter. Unemployment in Latin America and the Caribbean, (USA: International Monetary Fund, 2011) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

JEL Cl 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.

Subject: Balance of payments, Capital outflows, Labor, Labor markets, Social security contributions, Taxes, Unemployment, Unemployment rate

Keywords: Capital flight, Capital outflows, Caribbean, Core period, Country, Disinflation, Europe, Exchange rate rigidity, Further capital flight, Hysteresis, IADB data, Labor markets, Labor-market variable, Latin America, Long-run unemployment, Monetary Policy, Natural rate of unemployment, NICs, Social security contributions, Standard deviation, Time effect, Time series, Unemployment, Unemployment rate, Worsening capital flight, WP

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/252
Stock No:

WPIEA2011252
ISBN:

9781463923341
ISSN:

1018-5941

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