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Labour Market Policies and Unemployment in the OECD

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Author Info
Richard Jackman
Christopher A. Pissarides
S Savouri

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Abstract

The massive increase in unemployment throughout the OECD since the early 1970s has led governments in many countries to introduce, or to expand, labour market policies such as training schemes, employment subsidies, public works or schemes of counselling or assistance in job search. Such programmes have the objective of reducing unemployment by improving the workings of the labour market. This paper first briefly describes the types of programmes that have been introduced in many OECD countries in recent years. It then suggests a model of the labour market, based on the relationship of unemployment and vacancies (or Beveridge curve), within which the rise in unemployment can be analysed and the effects of policies and of institutions examined. Using the framework, we then identify the main factors causing shifts in unemployment and vacancy rates in 14 of the main OECD countries over the period 1970-88. Our main results are that while corporatism remains the institutional features with the biggest single impact in sustaining low unemployment rates, labour market policies also have a significant and well-defined effect on unemployment which appears large relative to the budgetary costs of the programmes.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0011.

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Date of creation: Nov 1990
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Handle: RePEc:cep:cepdps:dp0011

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    Other versions:
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    Other versions:
  11. Van der Linden, Bruno & Dor, Eric, 1998. "The net effect of unemployment benefits, sanctions and training on aggregate unemployment outflows," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2000020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 07 Sep 2000. [Downloadable!]
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    Other versions:
  15. Emmanuel Petrakis & Minas Vlassis, . "Endogenous Wage-Bargaining Institutions in Oligopolistic Sectors," Working Papers 0105, University of Crete, Department of Economics, revised 00 Dec 2001. [Downloadable!]
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  16. Howard J. Wall & Gylfi Zoega, 2001. "The British Beveridge curve: a tale of ten regions," Working Papers 2001-007, Federal Reserve Bank of St. Louis. [Downloadable!]
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  17. Carlo Altavilla & Floro Ernesto Caroleo, 2006. "Evaluating the Dynamic Effects of Active Labour Policies in Italy," Discussion Papers 8_2006, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
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  18. T. Boeri & M. C. Burda, . "Active Labor Market Policies, Job Matching and the Czech Miracle," Sonderforschungsbereich 373 1995-76, Humboldt Universitaet Berlin.
    Other versions:
  19. Elizabeth Webster & Lei Lei Song, 2001. "How Segmented Are Skilled and Unskilled Labour Markets: The Case of Beveridge Curves," Melbourne Institute Working Paper Series wp2001n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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  20. Sonsoles Castillo & Juan F. Jimeno & Omar Licandro, . "Employment segmentation, labour mobility and Mismatch: Spain, 1987-1993," Working Papers 98-04, FEDEA. [Downloadable!]
    Other versions:
  21. John P Martin, 1998. "What Works Among Active Labour Market Policies: Evidence from OECD Countries' Experiences," RBA Annual Conference Volume, in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia. [Downloadable!]
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  22. Carlo Altavilla, Floro Ernesto Caroleo, 2004. "Evaluating Asimmetries in Active Labour Policies: The Case of Italy," CELPE Discussion Papers 84, CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy. [Downloadable!]
  23. David C. Maré, 2005. "Indirect Effects of Active Labour Market Policies," Working Papers 05_01, Motu Economic and Public Policy Research. [Downloadable!]
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