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Evolution and structure of unemployment in the metropolitan area of Cali 1988-1998. Does the unemployment rate present hysteresis?


  • Carlos Castellar
  • Jose Ignacio Uribe

    () (Universidad del Valle)


This article analyses unemployment’s structural components. The changes observed in the unemployment rate in Cali during the period from 1988 to 1994 were caused by a decrease in average job-search time or increased rate of ceasing to be unemployed. The empirical evidence rejected the hypothesis regarding total or partial hysteresis in unemployment. A decrease in this rate cannot be explained by endogenous factors if the unemployment rate does not have unit root (total or partial hysteresis thus not being found). Labour market flexibility policies are consequently not appropriate for solving the problem

Suggested Citation

  • Carlos Castellar & Jose Ignacio Uribe, 2004. "Evolution and structure of unemployment in the metropolitan area of Cali 1988-1998. Does the unemployment rate present hysteresis?," Colombian Economic Journal, Academia Colombiana de Ciencias Economicas, Colegio Mayor de Nuestra Senora del Rosario, Pontificia Universidad Javeriana, Universidad de Antioquia, Universidad de los Andes, Universidad del Valle, Universidad Externado de Colombia, Universidad Nacional de Colombia, vol. 2(1), pages 121-155, November.
  • Handle: RePEc:cej:primer:v:2:y:2004:i:1:p:121-155

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    References listed on IDEAS

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    More about this item


    unemployment rate; hysteresis; Dickey and Fuller test;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity


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