UNEMPLOYMENT RATE AND THE REAL WAGE BEHAVIOR: A NEOCLASSICAL HINT FOR THE COLOMBIAN LABOR MARKET ADJUSTMENT

Luis Arango Thomas and Carlos Posada

No 3736, Borradores de Economia from Banco de la Republica

Abstract: The Colombian urban unemployment rate grew dramatically over the last six years. At the same time the real wage also had a sharp increase. The empirical evidence supports the hypothesis that an exogenous increase in the real wage was a cause of the unemployment growth. The long-run elasticity suggests that one percent increase of the real wage index increases unemployment rate something between 0.7 and 1.0 percent. Therefore it seems necessary that real wage comes back to its equilibrium path for the reduction of the unemployment rate to the natural level.

Keywords: Unemployment rate (search for similar items in EconPapers)
JEL-codes: E24 (search for similar items in EconPapers)
Pages: 9
Date: 2001-06-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.banrep.gov.co/docum/ftp/borra180.pdf

Related works:
Working Paper: Unemployment Rate and the Real Wage Behavoir: A Neoclassical Hint for the Colombian Labor Market Adjustment (2001)
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:col:000094:003736

Access Statistics for this paper

More papers in Borradores de Economia from Banco de la Republica
Bibliographic data for series maintained by Clorith Angelica Bahos Olivera ().