Unemployment hysteresis in the English-speaking Caribbean: evidence from non-linear models
AbstractIn the Caribbean Basin, as in many other parts of the world, unemployment, with rates between 15 and 30 percent, has become one of the major problems affecting these societies. This article highlights the specific characteristics of Caribbean unemployment, contrasting them with those observed in the industrialized and developed nations. Secondly, it summarizes the main ideas that have been proposed to explain the problem of unemployment hysteresis and discusses their appropriateness in the case of the countries under consideration. Finally, it uses the framework of threshold models and processes with nonlinearities in the mean to empirically examine the hypothesis of hysteresis. The results supported these non- linear specifications: for Barbados, an LSTAR model is preferred while in the case of Trinidad and Tobago, an ESTAR specification is selected.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33440.
Date of creation: 2011
Date of revision:
Unemployment persistence; Unit root tests; Non-linear models;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-22 (All new papers)
- NEP-LAB-2011-09-22 (Labour Economics)
- NEP-MAC-2011-09-22 (Macroeconomics)
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