Candidate Explanations
We examine two sets of variables that might influence unemployment:
measures of economic development and measures of labor-market distortions
caused by government policy. Labor market policies are a focus of research on
unemployment in advanced economies (e.g. Siebert, 1997; Nickell, 1997).
Development levels are natural to examine in our context because they vary
greatly across LAC countries; in 2000, for example, real GDP per capita ranged
from US$ 2126 in Nicaragua to US$ 12095 in Mexico.