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The European Unemployment Dilemma

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Author Info

  • Ljungqvist, L
  • Sargent, T-J

Abstract

Post World War II European welfare states experienced several decades of relatively low unemployment, followed by a plague of persistently high unemployment since the 1980's. We impute the higher unemployment to welfare states' diminished ability to cope with more turbulent economic times, such as the ongoing restructuring form manufacturing to the service industry, adoption of new information technolgoies and a rapidly changing international economy. We use a general equilibrium search model where workers accumulate skills on the job and lose skills during unemployment.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics (IFN) in its series Research Institute of Industrial Economics Working Papers with number 481.

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Length: 39 pages
Date of creation: 1997
Date of revision:
Handle: RePEc:fth:iniesr:481

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Postal: Research Institute of Industrial Economics (IFN) ; B.O. Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
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Web page: http://www.ifn.se/
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Keywords: GENERAL EQUILIBRIUM ; SKILLED WORKERS ; UNEMPLOYMENT ; WELFARE ECONOMICS;

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References

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  1. Olivier J. Blanchard & Lawrence H. Summers, 1987. "Hysteresis and the European Unemployment Problem," NBER Working Papers 1950, National Bureau of Economic Research, Inc.
  2. Ljungqvist, Lars & Sargent, Thomas J., 1995. "The Swedish unemployment experience," European Economic Review, Elsevier, vol. 39(5), pages 1043-1070, May.
  3. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
  4. Hall, Robert E, 1982. "The Importance of Lifetime Jobs in the U.S. Economy," American Economic Review, American Economic Association, vol. 72(4), pages 716-24, September.
  5. Malinvaud,Edmond, 1994. "Diagnosing Unemployment," Cambridge Books, Cambridge University Press, number 9780521445337.
  6. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
  7. Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345, July.
  8. Peter Gottschalk & Robert Moffitt, 1994. "The Growth of Earnings Instability in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 217-272.
  9. Ljungqvist, Lars & Sargent, Thomas J, 1995. "Welfare States and Unemployment," Economic Theory, Springer, vol. 6(1), pages 143-60, June.
  10. Richard G. Harris, 1993. "Globalization, Trade, and Income," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 755-76, November.
  11. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November.
  12. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
  13. James J. Heckman, 1981. "Heterogeneity and State Dependence," NBER Chapters, in: Studies in Labor Markets, pages 91-140 National Bureau of Economic Research, Inc.
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  1. In Praise of Calibration, by Garett Jones
    by ? in Econlog on 2012-10-25 06:51:30
  2. Sticky Price Keynesianism & Monetarism are ZMP Theories, by Garett Jones
    by ? in Econlog on 2013-04-17 17:55:39
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