Do Labour Market Reforms Pay Off? Unemployment and Capital Accumulation in Portugal

Bruno Damásio and Diogo Martins ()

No 2017/01, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: The aim of this paper is to study the long-run relationship between unemployment, capital accumulation and labour market variables in Portugal for the 1985Q1-2013Q4 period. We use an ARDL-bounds test model to perform the econometric estimation. We find evidence that capital accumulation has been the main driver of long-run unemployment (NAIRU), whilst labour market variables have played either a negligible or an existent explicative role. It suggests that Portuguese NAIRU is endogenous relative to capital accumulation. Consequently, we conclude that the labour market reforms proposed by Troika were inadequate to the Portuguese case as they were based upon a theoretical framework (exogenous NAIRU model) that was not representative of the Portuguese labour market.

Keywords: NAIRU; Unemployment; Capital Accumulation; Labour Market Institutions; ARDL; Bounds Test; Post Keynesian Economics (search for similar items in EconPapers)
JEL-codes: E11 E12 E17 E22 E24 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://depeco.iseg.ulisboa.pt/wp/wp012017.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ise:isegwp:wp012017

Access Statistics for this paper

More papers in Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa Department of Economics, ISEG - Lisbon School of Economics and Management, Universidade de Lisboa, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL.
Bibliographic data for series maintained by Vitor Escaria ().