{
  "title": "Explaining High Unemployment in ECCU Countries",
  "publication": "IMF Working Papers, July 11, 2019",
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  "summary": "In recent years, unemployment rates in some ECCU countries have been among the highest globally. This paper evaluates several factors that could explain them, finding that high unit labor costs, in a context of strong unionization, are significantly associated with high structural unemployment, whil",
  "sections": [
    {
      "heading": "Authors and Publication",
      "content": "- By Ronald James, Jemma Lafeuillee, Mike Xin Li, Gonzalo Salinas, Yevgeniya Savchenko\n- July 11, 2019\n- Working Paper No. 2019/144, Volume: 2019, Issue: 144\n- Pages: 32\n- DOI: https://doi.org/10.5089/9781498318709.001\n- Stock No: WPIEA2019144\n- ISBN: 9781498318709\n- ISSN: 1018-5941"
    },
    {
      "heading": "Summary of Principal Findings",
      "content": "- In recent years, unemployment rates in some ECCU countries have been among the highest globally.\n- High unit labor costs, in a context of strong unionization, are significantly associated with high structural unemployment.\n- The global crisis added a cyclical component to unemployment.\n- Growth of high-paid jobs in the public and tourism sectors, which have expanded considerably in recent decades, could have increased the reservation wage and lowered labor force participation.\n- There is no indication that high structural unemployment is related to the phase out of EU preferences on bananas/sugar exports.\n- There is no indication that high structural unemployment is related to a skills mismatch.\n- Large natural disasters have substantially, but only temporarily, fueled unemployment."
    },
    {
      "heading": "Analytical Themes and Evidence",
      "content": "- Labor costs and institutions:\n  - High unit labor costs correlated with high structural unemployment.\n  - Strong unionization provides the institutional context amplifying the labor-cost effect.\n- Cyclical vs. structural components:\n  - The global crisis contributed a cyclical component on top of structural unemployment drivers.\n- Sectoral composition and reservation wages:\n  - Expansion of high-paid public sector and tourism jobs likely raised reservation wages, potentially reducing labor force participation.\n- Excluded explanations:\n  - Phase-out of EU preferences for bananas/sugar exports not supported as a driver of high structural unemployment.\n  - No evidence found for a skills mismatch explaining high structural unemployment.\n- Natural disasters:\n  - Large natural disasters caused substantial short-term increases in unemployment, but these effects were temporary."
    },
    {
      "heading": "Subjects and Keywords",
      "content": "- Subject: Employment, Labor, Public sector wages, Unemployment, Unemployment rate, Wages\n- Keywords: Caribbean, Central Asia, country, demonstration effect, East Asia, ECCU, ECCU country, ECCU economy, ECCU wage, Employment, Global, labor market factors, Public sector wages, reservation wage, Sub-Saharan Africa, unemployment, Unemployment rate, wage, wage growth, wage inflation, Wages, WP\n\nIMF Working Papers — \"Explaining High Unemployment in ECCU Countries\" (Working Paper No. 2019/144, July 11, 2019).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/07/11/explaining-high-unemployment-in-eccu-countries-46971"
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    "Authors: Ronald James, Jemma Lafeuillee, Mike Xin Li, Gonzalo Salinas, Yevgeniya Savchenko",
    "Published: July 11, 2019",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781498318709.001",
    "By Ronald James, Jemma Lafeuillee, Mike Xin Li, Gonzalo Salinas, Yevgeniya Savchenko",
    "July 11, 2019",
    "Working Paper No. 2019/144, Volume: 2019, Issue: 144",
    "Pages: 32",
    "DOI: https://doi.org/10.5089/9781498318709.001",
    "Stock No: WPIEA2019144",
    "ISBN: 9781498318709",
    "ISSN: 1018-5941",
    "In recent years, unemployment rates in some ECCU countries have been among the highest globally.",
    "High unit labor costs, in a context of strong unionization, are significantly associated with high structural unemployment.",
    "The global crisis added a cyclical component to unemployment.",
    "Growth of high-paid jobs in the public and tourism sectors, which have expanded considerably in recent decades, could have increased the reservation wage and lowered labor force participation.",
    "There is no indication that high structural unemployment is related to the phase out of EU preferences on bananas/sugar exports.",
    "There is no indication that high structural unemployment is related to a skills mismatch.",
    "Large natural disasters have substantially, but only temporarily, fueled unemployment.",
    "Labor costs and institutions:",
    "Cyclical vs. structural components:",
    "Sectoral composition and reservation wages:",
    "Excluded explanations:",
    "Natural disasters:",
    "Subject: Employment, Labor, Public sector wages, Unemployment, Unemployment rate, Wages",
    "Keywords: Caribbean, Central Asia, country, demonstration effect, East Asia, ECCU, ECCU country, ECCU economy, ECCU wage, Employment, Global, labor market factors, Public sector wages, reservation wage, Sub-Saharan Africa, unemployment, Unemployment rate, wage, wage growth, wage inflation, Wages, WP",
    "**Working Paper**"
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