Unemployment in Latin America and the Caribbean

46 Pages Posted: 8 Aug 2011

See all articles by Laurence Ball

Laurence Ball

Johns Hopkins University - Department of Economics; National Bureau of Economic Research (NBER); International Monetary Fund (IMF)

Nicolás de Roux

Universidad de los Andes - Department of Economics

Marc Hofstetter

Universidad de los Andes

Multiple version iconThere are 2 versions of this paper

Date Written: August 2011

Abstract

This study constructs a new data set on unemployment rates in Latin America and the Caribbean and then explores the determinants of unemployment. We compare different countries, finding that unemployment is influenced by the size of the rural population and that the effects of government regulations are generally weak. We also examine large, persistent increases in unemployment over time, finding that they are caused by contractions in aggregate demand. These demand contractions result from either disinflationary monetary policy or the defense of an exchange-rate peg in the face of capital flight. Our evidence supports hysteresis theories in which short-run changes in unemployment influence the natural rate.

Suggested Citation

Ball, Laurence M. and de Roux, Nicolás and Hofstetter, Marc, Unemployment in Latin America and the Caribbean (August 2011). NBER Working Paper No. w17274, Available at SSRN: https://ssrn.com/abstract=1906208

Laurence M. Ball (Contact Author)

Johns Hopkins University - Department of Economics ( email )

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Nicolás De Roux

Universidad de los Andes - Department of Economics ( email )

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Colombia

Marc Hofstetter

Universidad de los Andes ( email )

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Colombia

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