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Youth Unemployment in Europe: Persistence and Macroeconomic Determinants

Author

Listed:
  • Guglielmo Maria Caporale

    () (1] Department of Economics and Finance, Brunel University, Uxbridge, London, UB8 3PH, UK.)

  • Luis Gil-alana

    () (School of Economics, University of Navarra, Pamplona, Spain.)

Abstract

This paper investigates the statistical features and the macroeconomic determinants of youth unemployment in a number of European countries. First, it explores its short and long memory properties by estimating both autoregressive and fractional integration. This analysis sheds light on the degree of persistence of the series, and on whether policy actions are required for highly persistent series. Second, it investigates the main determinants of youth unemployment in Europe by estimating fractional cointegration models. The evidence suggests that this series is highly persistent in all the countries examined, and that in some of them there is a significant long-run equilibrium relationship linking it to macroeconomic variables such as GDP and inflation.

Suggested Citation

  • Guglielmo Maria Caporale & Luis Gil-alana, 2014. "Youth Unemployment in Europe: Persistence and Macroeconomic Determinants," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 56(4), pages 581-591, December.
  • Handle: RePEc:pal:compes:v:56:y:2014:i:4:p:581-591
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    References listed on IDEAS

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    1. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Chapters,in: NBER Macroeconomics Annual 1986, Volume 1, pages 15-90 National Bureau of Economic Research, Inc.
    2. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
    3. Marinucci, D & Robinson, Peter M., 2001. "Semiparametric fractional cointegration analysis," LSE Research Online Documents on Economics 2269, London School of Economics and Political Science, LSE Library.
    4. Jacobsen, Joyce P., 1999. "Labor force participation," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(5), pages 597-610.
    5. Luis A. Gil-Alana, 2003. "Testing of Fractional Cointegration in Macroeconomic Time Series," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 517-529, September.
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    15. Graafland, J J, 1991. "On the Causes of Hysteresis in Long-Term Unemployment in the Netherlands," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(2), pages 155-170, May.
    16. Misbah Tanveer Choudhry & Enrico Marelli & Marcello Signorelli, 2012. "Youth unemployment rate and impact of financial crises," International Journal of Manpower, Emerald Group Publishing, vol. 33(1), pages 76-95, March.
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    Citations

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    Cited by:

    1. Maria Laura Parisi & Enrico Marelli & Olga Demidova, 2015. "Labour Productivity of Young and Adult Temporary Workers and Youth Unemployment: a Cross-country Analysis," Discussion Papers 1_2015, CRISEI, University of Naples "Parthenope", Italy.
    2. Floro Ernesto Caroleo & Elvira Ciociano & Sergio Destefanis, 2017. "The role of the education systems and the labour market institutions in enhancing youth employment: a cross-country analysis," Discussion Papers 1_2017, CRISEI, University of Naples "Parthenope", Italy.
    3. Urbánné Mező, Júlia & Udvari, Beáta, 2016. "Munkapiaci rugalmasság és ifjúsági foglalkoztathatóság
      [Labour-market flexibility and youth employment]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 431-460.
    4. repec:eur:ejesjr:120 is not listed on IDEAS
    5. Iva Tomic, 2016. "What drives youth unemployment in Europe?," Working Papers 1601, The Institute of Economics, Zagreb.
    6. repec:spr:italej:v:3:y:2017:i:1:d:10.1007_s40797-016-0045-8 is not listed on IDEAS
    7. repec:spr:soinre:v:135:y:2018:i:2:d:10.1007_s11205-016-1492-1 is not listed on IDEAS

    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • 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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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