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Structural Estimates of Equilibrium Unemployment in Six OECD Economies

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Abstract

In Europe, neither unemployment rates nor institutions are uniform. In the EMU, countries have coordinated their monetary policy, and fiscal policy might follow. Does convergence in fiscal policy imply that unemployment rates will converge, too, or is diversified fiscal policy desirable? An answer to this question requires insight into the dependence on fiscal policy of the unemployment rate in equilibrium. This study estimates the equilibrium rate of unemployment and shows that it has been affected significantly by taxes and benefits. Uniform fiscal policy would not, however, harmonise the unemployment rates because the impact of policy varies widely across the OECD economies.

Suggested Citation

  • Albert van der Horst, 2003. "Structural Estimates of Equilibrium Unemployment in Six OECD Economies," Economics Working Papers 022, European Network of Economic Policy Research Institutes.
    • Handle: RePEc:epr:enepwp:022
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    File URL: http://www.enepri.org/Publications/WP022.pdf
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    Cited by:

    1. Alho, Kari O.E. & Nikula, Nuutti, 2006. "Productivity, Empoyment and Taxes - Evidence on the Potential Trade-offs and Impacts in the EU," Discussion Papers 1054, The Research Institute of the Finnish Economy.
    2. Demougin, Dominique M. & Helm, Carsten, 2008. "Incentive contracts and efficient unemployment benefits," Darmstadt Discussion Papers in Economics 191, Darmstadt University of Technology, Department of Law and Economics.
    3. Katarzyna Budnik, 2012. "Do those who stay work less? On the impact of emigration on the measured TFP in Poland," NBP Working Papers 113, Narodowy Bank Polski.
    4. Marc van der Steeg & Roel van Elk & Dinand Webbink, 2012. "Does intensive coaching reduce school dropout?," CPB Discussion Paper 224.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Enache Cosmin, 2013. "Adverse Incentive Effects of the Unemployment Benefit Level in Romania," Scientific Annals of Economics and Business, Sciendo, vol. 60(1), pages 54-66, July.
    6. Leon Bettendorf & Albert van der Horst & Ruud A. De Mooij, 2009. "Corporate Tax Policy and Unemployment in Europe: An Applied General Equilibrium Analysis," The World Economy, Wiley Blackwell, vol. 32(9), pages 1319-1347, September.
    7. Ulrich Fritsche & Camille Logeay & Kirsten Lommatzsch & Katja Rietzler & Sabine Stephan & Rudolf Zwiener unter Mitarb. von Cansel Kiziltepe & Christian Proano-Acosta, 2005. "Auswirkungen von länderspezifischen Differenzen in der Lohn-, Preisniveau- und Produktivitätsentwicklung auf Wachstum und Beschäftigung in den Ländern des Euroraums: Endbericht ; Forschungsprojekt im ," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 8, number pbk8, Enero-Abr.
    8. Pekka Sauramo, 2007. "Current wage pressures in some EU countries," Working Papers 230, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    9. Demougin, Dominique & Helm, Carsten, 2011. "Job matching when employment contracts suffer from moral hazard," European Economic Review, Elsevier, vol. 55(7), pages 964-979.
    10. Demougin, Dominique M. & Helm, Carsten, 2008. "Incentive contracts and efficient unemployment benefits," Darmstadt Discussion Papers in Economics 191, Darmstadt University of Technology, Department of Law and Economics.
    11. Patrick Minford & Ruthira Naraidoo, 2010. "Vicious And Virtuous Circles – The Political Economy Of Unemployment," South African Journal of Economics, Economic Society of South Africa, vol. 78(1), pages 1-22, March.
    12. Michal Benèík, 2022. "United in Diversity. Labor Markets in the CEE Countries," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(4), pages 333-348, April.
    13. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
    14. Frédéric Reynés, 2006. "La formation des salaires et le concept de taux de chômage d’équilibre. Une tentative de réconciliation des courbes Wage Setting et de Phillips," Sciences Po publications info:hdl:2441/f4rshpf3v1u, Sciences Po.
    15. Ruud de Mooij, 2004. "Towards efficient unemployment insurance in the Netherlands," CPB Memorandum 100, CPB Netherlands Bureau for Economic Policy Analysis.
    16. Michal Benèík, 2022. "United in Diversity. Labor Markets in the CEE Countries," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(4), pages 333-348, April.
    17. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    18. Ruud de Mooij, 2004. "Towards efficient unemployment insurance in the Netherlands," CPB Memorandum 100.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    19. repec:spo:wpecon:info:hdl:2441/f4rshpf3v1umfa09lat19ap14 is not listed on IDEAS
    20. repec:hal:spmain:info:hdl:2441/f4rshpf3v1umfa09lat19ap14 is not listed on IDEAS
    21. Darius Hinz & Camille Logeay, 2006. "Forecasting Employment for Germany," IMK Working Paper 01-2006, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute, revised Jan 2006.
    22. Alho, Kari & Nikula, Nuutti, 2007. "Productivity, Employment and Taxes - A SVAR Analysis of Trade-offs and Impacts," Discussion Papers 1074, The Research Institute of the Finnish Economy.
    23. Cosmin ENACHE, 2012. "Unemployment Benefit, Minimum Wage And Average Salary Earnings In Romania," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 10, pages 85-96, December.
    24. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
    25. repec:hal:wpspec:info:hdl:2441/f4rshpf3v1umfa09lat19ap14 is not listed on IDEAS

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