Jamaica is projected to exit a prolonged recession that has left deep scars in the
socioeconomic conditions of the country. Besides increasing macroeconomic
vulnerabilities and halting economic growth, advances in poverty and
unemployment were reversed. Unemployment bottomed in 2009 at 9.5 percent
but increased over the following years until reaching more than 16 percent by
April 2013, and poverty increased from 9.9 percent in 2007 to 17.6 percent in
2010. Following the literature on Okun’s rule of thumb, we explore how the
projected recovery will be reflected in the labor market. Results indicate that there
is an association between GDP growth and unemployment—a 1 percent growth in
GDP results in a 0.3 percent reduction in unemployment. These values indicate
that under current growth projections, unemployment in Jamaica will remain
above the psychologically important threshold of 10 percent for several years.