ii

- (1) The overall structure of unemployment is broadly similar to that observed for other countries. Unemployment rates are highest for the young -particularly for those 16 to 25 years of ageand have been consistently higher among women than among men. With regard te education, the highest unemployment rates for males correspond to those with either incomplete or complete lower secondary schooling (7 to 9 years of school). For females, the highest rates are found among those with either complete low secondary or higher secondary (9 to 12 years of school). This pattern of higher unemployment rates for secondary school graduates differs somewhat from that observed in other countriec, where unemployment appears to be more prevalent among the less-educated.

- (2) Unemployment rates as measured by official statistics are quite low, and have remained moderate throughout the adjustment process. This reflects the fact that most of the adjustment occurred through the real wage --which showed substantial downward flexibility-- rather than through employment. One consequence of this form of adjustment is that there has been relatively little productivity-enhancing employment restructuring.

- (3) The definition of unemployment used in official statistics tends to underestimate the true number of people who are jobless, because it fails to consider transitions in and out of the labor force, which are extremely frequent. The data show that 25% of all unemployment spells for men and 53% for women end in withdrawal from the labor forr, and that a large fraction of those who withdraw reenter the labor force within 3 months. These short spells out of the labor force should, in most cases, be considered as unemployment.

- (4) Using a more extensive alternative definition of unemployment!', the rate of male unemployment in 1988 is shown to increase from 3.4% to 6.4%. The largest increases in unemployment are observed for individuals under 20 years of age, ! :or those with little education. The use of this alternative definition thus yields a structurc **jf** unemployment by education more similar to that observed in most countries.

- (5) Multivariate analysis confirms that age, sex and education are key determinants of unemployment. Estimates obta' i' - from a probit model reveal that the probability of unemployment decreases with age and education for both men and women. The probit analysis also finds a strong effect of marital status, although this effect tends to go in opposite .lirections for men and women. Marriage is associated with lower risk of unemployment for men and foL more educated women, but increases the probability of unemployment for women at low levels of education.

- (6) The analysis of the distribution of completed unemployment spells suggests that the typical unemployment spell is not long. About 40% of all unemployment spells among men end within three months, and one-half of all spells are completed within four to five months.w The mean duration of a completed spell for males is about 5.7 months. Mean duration for

**1/** Which includes individuals who are not working and not actively looking for a job, but who are not studying, nor taking care of the household, nor retired nor physicaUy disabled.

2' These figures refer to the standard definition of unemployment. Corresponding figures for the alte.r-a,n.e defunition of unemployment are presented in Table 11. Throughout the report, results regarding composition, duration and persistence of unemployment are presented separately for both definitions o' the unemployed.