Unemployment - poverty trade-offs
AbstractThe author examines the potential trade-offs that may arise between poverty alleviation and unemployment reduction. He discusses various analytical arguments that may provide a rationale for their existence, and uses three alternative methodologies to assess their relevance: a vector autoregression framework (which is applied to Brazil and Chile), cross-country regressions, and simulations with a structural macro model linked to a household survey. Impulse response functions to output and wage shocks indicate no short-run tradeoff. between unemployment and poverty. By contrast, regression results, which control for a variety of determinants of poverty rates across countries, suggest that such a trade-off may indeed exist. Simulations with the structural model show that labor market reforms may induce both short- and long-run trade-offs between the composition of unemployment and the incidence of poverty among household groups.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3297.
Date of creation: 01 May 2004
Date of revision:
Public Health Promotion; Health Monitoring&Evaluation; Economic Theory&Research; Environmental Economics&Policies; Labor Policies; Environmental Economics&Policies; Health Monitoring&Evaluation; Economic Theory&Research; Achieving Shared Growth; Poverty Assessment;
Other versions of this item:
- Pierre-Richard Agénor, 2005. "Unemployment-Poverty Tradeoffs," Central Banking, Analysis, and Economic Policies Book Series, in: Jorge Restrepo & Andrea Tokman R. & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Edi (ed.), Labor Markets and Institutions, edition 1, volume 8, chapter 5, pages 115-165 Central Bank of Chile.
- NEP-ALL-2004-08-16 (All new papers)
- NEP-CMP-2004-09-12 (Computational Economics)
- NEP-DEV-2004-08-16 (Development)
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