One Troika fits all? job crash, pro-market structural reform and austerity-driven therapy in Portugal

Diogo Martins, Bruno Damásio

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This article assesses the effectiveness of the labour market reforms implemented in Portugal as part of the Troika’s structural reform package. Using an ARDL-bounds test model to perform the econometric estimation, this investigation examines the long-run relationship between unemployment, capital accumulation and labour market variables for the 1985–2013 period. The econometric estimation suggests that capital accumulation has been the main driver of long-run unemployment, whilst labour market variables have played a minor explanatory role. These results suggest that Portuguese NAIRU is endogenous to capital accumulation and do not support the Troika’s emphasis on labor market reforms as a strategy to reduce long-term unemployment.

Original languageEnglish
Pages (from-to)495–521
JournalEmpirica
Volume47
Issue number3
Early online date11 Feb 2019
DOIs
Publication statusPublished - Aug 2020

Keywords

  • ARDL
  • Bounds test
  • Capital accumulation
  • Labour market institutions
  • NAIRU
  • Unemployment

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