Theoretical and Empirical Implications of the New Definition of Unemployment in Colombia

In June 2000 Colombia adopted a new definition of unemployment following the standards of the International Labour Organisation (ILO). This change implied a reduction of the unemployment rate of about two (percentage) points. In this paper we contrast the Colombian case with other countries' experiences in terms of the methodological transformation and its empirical implications. Afterwards, we test the empirical support of the change of methodology. Our results suggest specific implications on structural unemployment and its relationship to unemployment people's educational profile; therefore, they challenge the practical application of the ILO's standard unemployment definition to the Colombian case