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Title: Unemployment and Long-run Economic Growth: The role of Income Inequality and Urbanization
Author: Castells-Quintana, David
Royuela Mora, Vicente
Keywords: Atur
Condicions socials
Creixement econòmic
Crisi econòmica, 2008-2009
Social conditions
Economic growth
Global Financial Crisis, 2008-....
Issue Date: 2012
Abstract: Two of the most dramatic aspects of the current economic crisis are with no doubt the experience of high and persistent rates of unemployment and the accelerated pace at which inequalities increase. But high and persistent levels of unemployment and increasing inequality are more than a consequence of scarcer opportunities related to the crisis; they can also be negative determinants for subsequent long-run economic growth. In this work, we consider unemployment and income inequality, and interactions between both, as possible determinants of longrun growth by using cross-sectional international data. Our results suggest that: 1) while initial high unemployment rates do not seem to be statistically significant to explain long-run growth, they do have a negative and significant effect when interacting with increases in inequality. 2) When we differentiate based on levels of urbanization, increasing inequality harms growth in countries with high levels of urbanization, as well as in countries with low levels of urbanization in which there is high and persistent unemployment.
It is part of: Investigaciones Regionales , 2012, vol. 24, p. 153-173
ISSN: 1695-7253
Appears in Collections:Articles publicats en revistes (Econometria, Estadística i Economia Aplicada)

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