Unemployment in Africa: A Fractional Integration Approach
Authors
Luis A. Gil-Alaña
Guglielmo Maria Caporale
Type
Article
Publisher
Research Gate
Pages
10.1111/saje.12178
Country
Africa
Date
01-11-2017

This paper estimates long-memory models to analyse the stochastic behaviour of unemployment in eleven African countries (Botswana, Ethiopia, Ghana, Kenya, Malawi, Mauritius, Nigeria, Senegal, South Africa, Tanzania and Zambia) from the 1960s until 2010. The empirical results provide very strong evidence of lack of mean reversion in all series under examination. This suggests that hysteresis models are the most relevant for the African experience (not surprisingly, given the rigidities in their labour markets). Therefore in such countries shocks hitting the unemployment series will have permanent effects, and policy makers should take appropriate action to reverse the effects of negative shocks.

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