Unemployment rate and the creation of household in Portugal

Abstract

This paper deals with the case of Portugal from 2003 to 2017 and investigates the effect of a negative impact of its unem-ployment rate on the creation of new homes, together with the time that their creation is affected by the worsening of general economic conditions. To this end, this study uses a vector autoregressive model (VAR) in which many endogenous and exog-enous variables have been included that, according to the literature reviewed, will have a direct impact on creating new homes. The results show that the unemployment rate is the variable which more effectively explains the creation of new households, strengthening the relationship between the economic situation and other social variables, such as personal emancipation. In addition, the impact of such a perpetual shock on the unemployment rate continues to influence the build-ing of new homes throughout the two following years, when the situation returns to its initial levels.

Keywords

• Unemployment rate
• VAR
• Creation of household
• Economic crisis