Unemployment shocks and material deprivation in the European Union: A synthetic control approach

Luis Ayala, Javier Martín-Román () and Carolina Navarro

Economic Systems, 2023, vol. 47, issue 1

Abstract: This paper analyzes how material deprivation responds to drastic changes in unemployment levels. We explore unemployment shocks registered in some European Union countries during the so-called Great Recession. To do so, we apply the synthetic control methodology, which has been rarely used in the field of distributive analyses. We use this approach to identify the impact of unemployment shocks on material deprivation and conduct different sensitivity analyses to test the results. We find that contrary to the traditional assumption of the low sensitivity of material deprivation measures to changes in the economic cycle, unemployment shocks have a significant and rapid impact on material deprivation. This conclusion holds even when extending the period of analysis, changing the indicator of material deprivation, or modifying the definition of unemployment shock.

Keywords: Material deprivation; Unemployment shocks; Synthetic control method; EUSILC (search for similar items in EconPapers)
JEL-codes: I32 J64 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Unemployment Shocks and Material Deprivation in the European Union: A Synthetic Control Approach (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:47:y:2023:i:1:s0939362522001157

DOI: 10.1016/j.ecosys.2022.101053

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