Determinants of unemployment duration in an economy with high informality

We studied unemployment duration in an economy with high informality. The average duration of unemployment in an economy with these characteristics is three months, which is lower than the estimated value for more developed countries. The decreasing trend of this indicator is consistent with greater employment creation and economic growth. Informality of labor, self-employment, and inactivity are the main drivers behind the reduction of unemployment duration. The duration is also consistent with the existence a positive relationship between the rate of risk of leaving unemployment and the duration of unemployment for those recently unemployed. Finally, the duration of unemployment is unaffected by the changes in employment insurance system.