Unemployment Rate and the Real Wage Behaviour: a Neoclassical Hint for the Colombian Labour Market Adjustment

Publicado en

  • Applied Economics Letters


  • The Colombian urban unemployment rate has grown 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 a 1% increase of the real wage index increases unemployment rate something between 0.7% and 1.0%. Therefore it seems necessary that the real wage goes back to its equilibrium path for the reduction of the unemployment rate to the natural level.

fecha de publicación

  • 2002

Líneas de investigación

  • Cointegration
  • Long-run Elasticities
  • Real Wage
  • Unemployment Rate

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