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Unemployment rates and population changes in Spain

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Abstract

This paper discusses the long run effect of changes in the age distribution of Spanish population on the unemployment rate, disaggregated by sex and age segments in the light of cointegration theory given the non stationarity of the series. Four main results are obtained. First, empirical analysis does not provide a clear scheme concerning the long run relationships between population variables and the specificunemployment rates for different groups. Second, as a first approximation one can detect the existence of, at least, one long run equilibrium relationship in all sex-age groups, except for the ones including the middle aged unemployed female workers and oldest unemployed female workers. Third, a more thorough analysis enables us to justify the existence of such long run relationships for the youngest male workers and middle aged male workers. One cannot argue, however, a joint evolution of population variables and the unemployment rates associated with female workers and to the oldest male workers. Fourth, the short run dynamics of unemployment rates for the youngest (male and female workers) and the middle age male workers is affected by the transitory deviations from these long run relationships. Hence, from an applied economics point of view, the result stresses the likely failure of employment policies which do not take into account the heterogeneous composition of unemployed workers. It stresses the need to design particular policies for specific groups of workers depending on their age and sex characteristics.

Suggested Citation

  • Begoña Eguía & Cruz A. Echevarría, 2004. "Unemployment rates and population changes in Spain," Journal of Applied Economics, Universidad del CEMA, vol. 7, pages 47-76, May.
  • Handle: RePEc:cem:jaecon:v:7:y:2004:n:1:p:47-76
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    File URL: http://www.cema.edu.ar/publicaciones/download/volumen7/eguia.pdf
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    References listed on IDEAS

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    1. Johansen, Søren & Juselius, Katarina, 1992. "Testing structural hypotheses in a multivariate cointegration analysis of the PPP and the UIP for UK," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 211-244.
    2. Fair, Ray C & Dominguez, Kathryn M, 1991. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," American Economic Review, American Economic Association, vol. 81(5), pages 1276-1294, December.
    3. Engle, Robert F. & Yoo, Byung Sam, 1987. "Forecasting and testing in co-integrated systems," Journal of Econometrics, Elsevier, vol. 35(1), pages 143-159, May.
    4. Zimmermann, Klaus F, 1991. "Ageing and the Labor Market: Age Structure, Cohort Size and Unemployment," Journal of Population Economics, Springer;European Society for Population Economics, vol. 4(3), pages 177-200, August.
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    Cited by:

    1. Rojas, Juan A., 2005. "Life-cycle earnings, cohort size effects and social security: a quantitative exploration," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 465-485, February.

    More about this item

    Keywords

    unemployment rates; population aging; cointegration;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J19 - Labor and Demographic Economics - - Demographic Economics - - - Other
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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