Unemployment and Development

Bibliographic Data

ID9720547
AuthorsYing Feng (0009-0006-7838-3103, National University of Singapore , Singapore), David Lagakos (0000-0001-9427-7892, Boston University & NBER , USA, corresponding author), James E Rauch (University of California San Diego, NBER, USA & CESifo , Germany)
Year2024
Volume134
Issue658
Pages614-647
Publication date2024-01-29
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/ej/uead076
OpenAlexW3162851658
LanguageEN
Citations received6
References cited39

We draw on household survey data from countries of all income levels and document that average unemployment rates increase with gross domestic product per capita. This is accounted for almost entirely by low—rather than high—educated workers. We interpret these facts in a model with frictional labour markets, a traditional self-employment sector, skill-biased productivity differences across countries, and unemployment benefits that become more generous with development. A calibrated version of the model does well in explaining the cross-country patterns that we document. Counterfactual exercises point to skill-biased productivity differences as the most important factor in explaining the cross-country unemployment patterns

Counterfactual thinking · Demographic economics · Economics · Gross domestic product · Labour economics · Macroeconomics · Per capita · Per capita income · Percentage point · Point (geometry · Productivity · Unemployment · Unemployment rate · Economic theories and models · Income, Poverty, and Inequality · Labor market dynamics and wage inequality

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