Measuring unemployment persistence of different labor force groups in the greater São Paulo metropolitan area

Abstract

This article makes use of ARFIMA models and unit root tests with structural breaks to examine the unemployment persistence of different labor forces in the Greater Metropolitan Area of São Paulo. To this purpose, not only is the region's open unemployment rate analyzed but it is also disaggregated by gender, age, color and position within the household. The period ranges from January 1985 to November 2008 and, despite using a range of estimation methods, the presence of a unit root cannot be rejected in general. The exceptions are the series related to Age 15-17 and over 40. But even in these cases the parameter "d" lies above 0.5. This is an indication that the unemployment rates in São Paulo can be defined as non stationary and the majority of the series are not mean-reverting. Therefore, the disinflation policies implemented by the Brazilian policymakers in the last two decades, as well as changes in real variables, have had long-lasting effects on the unemployment rates in São Paulo.