The effects of increased labour market flexibility in the United Kingdom: theory and practice
AbstractThis paper uses the increase in labour market flexibility in the United Kingdom in recent years to see how well the predictions of a couple of recently developed labour market models can account for data. The two models examined are an 'equilibrium business cycle' model of the labour market and a 'search' model. The models do well in predicting the fall in the level and persistence of the unemployment rate and average hours since about 1985 as well as the step increase in consumption and output that seems to have occured. Conversely, unemployment incidence has fallen and the volatilities of output, consumption, employment and unemployment have all increased in the most recent cycle contrary to the predictions of the models.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank of England in its series Bank of England working papers with number 109.
Date of creation: Feb 2000
Date of revision:
Contact details of provider:
Postal: Publications Group Bank of England Threadneedle Street London EC2R 8AH
Phone: +44 (0)171 601 4030
Fax: +44 (0)171 601 5196
Web page: http://www.bankofengland.co.uk/
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-10-01 (All new papers)
- NEP-EEC-2001-10-01 (European Economics)
- NEP-LTV-2001-10-01 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dale T. Mortensen & Christopher A. Pissarides, 1993.
"Job Creation and Job Destruction in the Theory of Unemployment,"
CEP Discussion Papers
dp0110, Centre for Economic Performance, LSE.
- Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 397-415, July.
- John M. Abowd & Thomas Lemieux, 1991.
"The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada,"
NBER Working Papers
3808, National Bureau of Economic Research, Inc.
- Abowd, John M & Lemieux, Thomas, 1993. "The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada," The Quarterly Journal of Economics, MIT Press, vol. 108(4), pages 983-1014, November.
- Galí, Jordi, 1995.
"Real Business Cycles with Involuntary Unemployment,"
CEPR Discussion Papers
1206, C.E.P.R. Discussion Papers.
- Gali, Jordi, 1995. "Real Business Cycles with Involuntary Unemployment," Working Papers 95-12, C.V. Starr Center for Applied Economics, New York University.
- Phil Evans, 1998. "Why has the female unemployment rate fallen so much in Britain?," Bank of England working papers 87, Bank of England.
- Cho, J-O. & Cooley, T.F., 1988.
"Employment And Hours Over The Business Cycle,"
88-03, Rochester, Business - General.
- Scott, Andrew, 1996.
"The Determinants of UK Business Cycles,"
CEPR Discussion Papers
1409, C.E.P.R. Discussion Papers.
- Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
- Robert J. Hodrick & Edward Prescott, 1981.
"Post-War U.S. Business Cycles: An Empirical Investigation,"
451, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
- George A. Akerlof & Andrew K. Rose & Janet L. Yellen, 1988. "Job Switching and Job Satisfaction in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 495-594.
- Vincenzo Cassino & Richard Thornton, 2002. "Do changes in structural factors explain movements in the equilibrium rate of unemployment?," Bank of England working papers 153, Bank of England.
- Beatriz Armendariz, 2009. "Microfinance for Self-Employment Activities in the European Urban Areas: Contrasting Crédal in Belgium and Adie in France," Working Papers CEB 09-041.RS, ULB -- Universite Libre de Bruxelles.
- John Turner (ed.), 2001. "Pay at Risk: Compensation and Employment Risk in the United States and Canada," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number par, June.
- Athanasios Tagkalakis, 2006. "The effects of macroeconomic policy shocks on the UK labour market," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 11(3), pages 229-244.
- S. Sgherri, 2000. "When is labour market flexibility welcome? More on asymmetric policy impacts in Europe," WO Research Memoranda (discontinued) 619, Netherlands Central Bank, Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publications Group).
If references are entirely missing, you can add them using this form.