Evolution and structure of unemployment in the metropolitan area of Cali 1988-1998. Does the unemployment rate present hysteresis?

Carlos Castellar and Jose Ignacio Uribe ()
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Jose Ignacio Uribe: Universidad del Valle

Colombian Economic Journal, 2004, vol. 2, issue 1, 121-155

Abstract: This article analyses unemployment’s structural components. The changes observed in the unemployment rate in Cali during the period from 1988 to 1994 were caused by a decrease in average job-search time or increased rate of ceasing to be unemployed. The empirical evidence rejected the hypothesis regarding total or partial hysteresis in unemployment. A decrease in this rate cannot be explained by endogenous factors if the unemployment rate does not have unit root (total or partial hysteresis thus not being found). Labour market flexibility policies are consequently not appropriate for solving the problem

Keywords: unemployment rate; hysteresis; Dickey and Fuller test (search for similar items in EconPapers)
JEL-codes: C32 C52 E24 (search for similar items in EconPapers)
Date: 2004
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