Effects of US Dollar and Oil Prices on Ecuador’s Urban Unemployment Rate

Ecuador’s 2016 recession generated an academic debate about the effect of exogenous variables in the labor market. This paper analyzes the impact of oil prices and US dollar on Ecuador’s urban unemployment rate between June 2007 and June 2016. The study has two main objectives: i) to provide econometric evidence about the vulnerability of Ecuador’s unemployment rate due to a drop in oil prices and appreciation of US dollar; ii) to propose policies at the macro and micro levels in order to reduce oil dependency and protect employment. The methodology employed is a Distributed Lag Model under the Ordinary Least Squares regression. The main conclusions of this study are as follows: (i) the contemporary dollar exchange rate and the oil price with two lags explain the 46 % change of the urban unemployment rate in Ecuador; (ii) the cumulative effect shows that a 1 % drop in the oil price at t-2 and t-4 causes on average a 2.22 % growth in the unemployment rate; iii) a 1% appreciation in the US dollar results in a 10.85 % growth in the unemployment rate.

• Үндсэн зохиолч: Avellán-Solines, Guillermo (author)
• Формат: article
• Хэл сонгох: spa
• Хэвлэсэн: 2018
• Нөхцлүүд: Labor market; Exogenous variables; Dynamic causal effects; Distributed lag model; Mercado laboral; Variables exógenas; Efectos causales dinámicos; Modelo de rezagos distribuidos
• Онлайн хандалт: https://revistas.ute.edu.ec/index.php/economia-y-negocios/article/view/443