Youth Unemployment in Europe: Persistence and Macroeconomic Determinants

20 Pages Posted: 16 Apr 2014

See all articles by Guglielmo Maria Caporale

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance; London South Bank University; CESifo (Center for Economic Studies and Ifo Institute); German Institute for Economic Research (DIW Berlin)

Luis A. Gil-Alana

University of Navarra - Department of Economics

Date Written: March 15, 2014

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 models. This type of 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 statistically significant long-run equilibrium relationship linking it to macroeconomic variables such as GDP and inflation.

Keywords: youth unemployment, fractional integration, fractional cointegration

JEL Classification: C220, C320, J640

Suggested Citation

Caporale, Guglielmo Maria and Gil-Alana, Luis A., Youth Unemployment in Europe: Persistence and Macroeconomic Determinants (March 15, 2014). CESifo Working Paper Series No. 4696, Available at SSRN: https://ssrn.com/abstract=2425128

Guglielmo Maria Caporale (Contact Author)

Brunel University London - Department of Economics and Finance ( email )

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HOME PAGE: http://www.brunel.ac.uk/about/acad/bbs/bbsstaff/ef_staff/guglielmocaporale/

London South Bank University ( email )

Centre for Monetary and Financial Economics
London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
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German Institute for Economic Research (DIW Berlin) ( email )

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Berlin, 10117
Germany

Luis A. Gil-Alana

University of Navarra - Department of Economics ( email )

Campus de Arrosadia
Pamplona, 31006
Spain

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