Brazilian Youth Unemployment, Minimum Wage and Economic Cycles

This research sought to understand the Brazilian youth unemployment in the period 2003 -2011. The aim of this study is to verify if the business cycles and changes in the minimum wage have been increasing youth unemployment systematically, considering the control of socioeconomic variables. To develop such analyses, this study has considered linear panel data as one estimation method and dynamic panel as the other one. In addition, the current research has considered the four initial interviews contained in a Monthly Employment Survey (MES) database. The results of the study show that the youth unemployment rate has varied according to business cycles, wages and socioeconomic variables, like proportion of non-white labor force, formal sector and metropolitan region that the individual belongs to. Concerning the dynamic character of youth unemployment rate, the previous level of youth unemployment and business cycles are the main issues increasing the variability of youth unemployment rate. The present study splits the youth group into two subcategories, teens and young-adults, aiming at verifying whether the cycles and wages have been impacting youth unemployment at the similar rate. The results show that the two distinct subcategories demonstrate different sensitiveness, making room for the creation of different public policies.