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Jobless recoveries after financial crises (and the key role of the extensive margin of employment)

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  • Françoise Delmez

    (UNamur - DeFiPP)

Abstract

Using an dynamic panel of 15 developed countries over the 1960-2010 period, this paper compares employment and hours recovery paths after financial vs. non-financial crises. We show that post financial crises recoveries display a stronger uplift of individual hours and a weaker one of the employment rate. The results are robust to controlling for the strength of the recovery in terms of GDP growth per capita, the depth of the preceeding recession, labour-market institutions differences potentially correlated with financial vs non-financial crises and for dynamic panel bias. In conclusion, we argue that considering both margins of employment, in particular the role of extended hours in coping with rising output, improves our understanding of financial crises as a source of jobless recoveries.

Suggested Citation

  • Françoise Delmez, 2019. "Jobless recoveries after financial crises (and the key role of the extensive margin of employment)," LIDAM Discussion Papers IRES 2019015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2019015
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    Keywords

    Financial crises; jobless recoveries; employment; working time;
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