Assessing persistence in the Italian rate of unemployment in presence of structural breaks and regional asymmetries, 1977 to 2004

Michele Battisti

Applied Econometrics and International Development, 2006, vol. 6, issue 3

Abstract: This work aims to test the persistence of Italian unemployment rate during last fifty years. To this scope we find evidences of a unit root, also when we allow for the presence of structural shifts so that the level of unemployment has a path dependant behaviour. Secondly, we test a possible explanation of the persistence through the presence of cointegration relationships with some institutional labour market variables, such as the union membership. Thirdly, there are asymmetric macroregional behaviours so that the great bulk of persistence is given by Center – Southern unemployment. It implies that changes in unemployment level have longer duration in the poorest part of the country.

Keywords: hysteresis; unit root with breaks; cointegration (search for similar items in EconPapers)
JEL-codes: C22 J64 (search for similar items in EconPapers)
Date: 2006
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