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The persistence of regional disparities in labor markets: Evidence from Puerto Rico

Author

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  • Cesar Sobrino

    (Universidad Ana G. Mendez, Recinto de Gurabo)

Abstract

Puerto Rico, a US territory, has historically shown a high unemployment rate and one of the world's lowest labor participation rates, which suggests the presence of permanent disparities relative to the US. In this study, by accounting for the differences across the regional labor markets in Puerto Rico, we analyze whether the disparities between regional unemployment, employment, and labor force rates with either the US counterpart or the national counterpart are permanent. Using quarterly data from 1990:Q2 to 2019:Q4, univariate and panel unit root tests indicate that permanent disparities are present in the regional labor markets relative to the US and the national counterparts. However, relative to the latter, the processes are break stationary for some regions. Specifically, the evidence suggests that the unemployment disparities of the west area, the employment disparities of the south area, and the labor force disparities of the south and north areas are permanent. relative to the US. In this study, by accounting for the differences across the regional labor markets in Puerto Rico, we analyze whether the disparities between regional unemployment, employment, and labor force rates with either the US counterpart or the national counterpart are permanent. Using quarterly data from 1990:Q2 to 2019:Q4, univariate and panel unit root tests indicate that permanent disparities are present in the regional labor markets relative to the US and the national counterparts. However, relative to the latter, the processes are break stationary for some regions. Specifically, the evidence suggests that the unemployment disparities of the west area, the employment disparities of the south area, and the labor force disparities of the south and north areas are permanent. relative to the US. In this study, by accounting for the differences across the regional labor markets in Puerto Rico, we analyze whether the disparities between regional unemployment, employment, and labor force rates with either the US counterpart or the national counterpart are permanent. Using quarterly data from 1990:Q2 to 2019:Q4, univariate and panel unit root tests indicate that permanent disparities are present in the regional labor markets relative to the US and the national counterparts. However, relative to the latter, the processes are break stationary for some regions. Specifically, the evidence suggests that the unemployment disparities of the west area, the employment disparities of the south area, and the labor force disparities of the south and north areas are permanent.

Suggested Citation

  • Cesar Sobrino, 2022. "The persistence of regional disparities in labor markets: Evidence from Puerto Rico," Economics Bulletin, AccessEcon, vol. 42(4), pages 1728-1741.
    • Handle: RePEc:ebl:ecbull:eb-22-00119
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    More about this item

    Keywords

    Time Series; Convergence; Labor Market; Currency Area;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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