Assessing Persistence in the Italian Rate of Unemployment in Presence of Structural Breaks and Regional Asymmetries, 1977 to 2004

19 Pages Posted: 22 Aug 2008

See all articles by Michele Battisti

Michele Battisti

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: August 21, 2008

Abstract

This work aims to test the persistence of Italian unemployment rate during last fifty years. To this scope we find evidences of a unit root, also when we allow for the presence of structural shifts so that the level of unemployment has a path dependant behaviour. Secondly, we test a possible explanation of the persistence through the presence of cointegration relationships with some institutional labour market variables, such as the union membership. Thirdly, there are asymmetric macroregional behaviours so that the great bulk of persistence is given by Center - Southern unemployment. It implies that changes in unemployment level have longer duration in the poorest part of the country.

Keywords: Hysteresis, Unit root with breaks, Cointegration, Unemployment, Italy, Regional Assymmetries

JEL Classification: C22, J64

Suggested Citation

Battisti, Michele, Assessing Persistence in the Italian Rate of Unemployment in Presence of Structural Breaks and Regional Asymmetries, 1977 to 2004 (August 21, 2008). Applied Econometrics and International Development, Vol. 6, No. 3, 2006. Available at SSRN: https://ssrn.com/abstract=1245090

Michele Battisti (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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