The duration of unemployment in Metropolitan Lima

This paper studies the drivers of unemployment duration in Metropolitan Lima. The average duration of unemployment is approximately three months. The decreasing trend of this indicator is consistent with the positive trends of both job creation and economic growth. We claim that the informal labor market and self-employment are the principle drivers behind the short duration of unemployment, since these sectors are easy to access in the absence of a massive formal unemployment insurance system. The short duration of unemployment is also consistent with the existence of a positive relationship between the risk of leaving unemployment and the duration of unemployment for those recently unemployed. (Audio: Department of Economic Publications)