Unemployment and labor force participation in Italy

Abstract

Purpose: Our main purpose is to test the unemployment invariance hypothesis in Italy. Design/methodology/approach: This paper provides an empirical investigation of the unemployment and labor force participation in Italy. Findings: Cointegration analysis results strongly suggest a clear long-run relationship between unemployment and labor force participation revealing a persistent and general added worker effect. Originality/value: Our results seem to confute the unemployment invariance hypothesis.