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New Revelations about Unemployment Persistence in Spain

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Author Info
Luis Alberiko Gil-Alana () (Universidad de Navarra)
Pedro Garcia-del-Barrio () (Universitat Internacional de Catalunya)

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Abstract

This paper aims to re-examine the persistence of unemployment in Spain. For this purpose, we use time series and cross-section analysis. From a time series viewpoint we disaggregate unemployment by regions, and use unit root tests, AR coefficients and fractional differencing parameters as indicators of persistence. For the cross-section approach, we first estimate mean regressions of regional unemployment rates. Then, using a panel of 114 periods and 50 provinces, we estimate pooled, fixed and random effects models. Finally, following some recent developments, we implement several panel data unit root tests. Previous studies had already shown the strong persistence of Spanish unemployment. Our disaggregated analysis extends that finding to reveal that the persistence is greater in the most industrialised regions. The results also suggest that a structural break took place in 1994, implying a decline in the unemployment persistence since then.

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Paper provided by School of Economics and Business Administration, University of Navarra in its series Faculty Working Papers with number 10/06.

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Length: 37 pages
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Publication status: Forthcoming, Applied Economics
Handle: RePEc:una:unccee:wp1006

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J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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