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Policy Influences on Unemployment: The European Experience

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  • Pissarides, Christopher A

Abstract

This paper considers the implications of four kinds of labour market policies for the 1980s rise in European unemployment: unemployment compensation, active labour market policies, employment protection legislation and taxation. It finds evidence that all have played a role in the determination of unemployment and discusses the mechanisms involved, the extent of the influence of each and the lessons learned from this experience. One of the main findings is that there is a trade-off between wage inequality and unemployment. Policy has played a role in determining how a country responded to the negative macroeconomic shocks of the 1980s but policy alone cannot explain the full rise in European unemployment and North American wage inequality. Copyright 1999 by Scottish Economic Society.

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Bibliographic Info

Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 46 (1999)
Issue (Month): 4 (September)
Pages: 389-418

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Handle: RePEc:bla:scotjp:v:46:y:1999:i:4:p:389-418

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Cited by:
  1. Domenico Fanizza & Taline Koranchelian, 2005. "How does Employment Protection Legislation Affect Unemployment in Tunisia? A Search Equilibrium Approach," IMF Working Papers 05/92, International Monetary Fund.
  2. Christopher A. Pissarides, 2003. "Unemployment in Britain: A European Success Story," CESifo Working Paper Series 981, CESifo Group Munich.
  3. Erkki Koskela & Rune Stenbacka, 2001. "Equilibrium Unemployment with Credit and Labour Market Imperfections," CESifo Working Paper Series 419, CESifo Group Munich.
  4. Banker, Rajiv D. & Byzalov, Dmitri & Chen, Lei (Tony), 2013. "Employment protection legislation, adjustment costs and cross-country differences in cost behavior," Journal of Accounting and Economics, Elsevier, vol. 55(1), pages 111-127.
  5. Norbert Berthold, 2000. "Abbau von Inflexibilitäten auf dem Arbeitsmarkt - Ist die Wirtschaftspolitik auf dem richtigen Weg?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 1(2), pages 229-250, 05.
  6. Robert Shimer, 2002. "The Research Agenda: Labor Market Frictions and Business Cycles," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 4(1), November.

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