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Labour market and oil price shocks. A cohort and PVAR analysis for Ecuador. Cuadernos de Economía

Abstract:

This paper estimates the effect of oil price volatility on the Ecuadorian labour market and analyses how this effect may be related with some structural labour inequalities. In that sense, the paper combines an econometric cohort model with a PVAR model, both estimated using labour surveys and macroeconomic data from Ecuador for the period 2007-2019. Using those models, it was found that a higher oil price has positive and significant effects on economic activity, labour income and labour quality, implying that the Ecuadorian labour market is strongly vulnerable to oil price shocks