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Structural Labor Market Changes in France

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Author Info

  • Estevão, Marcello

    ()
    (International Monetary Fund)

  • Nargis, Nigar

    ()
    (University of Dhaka)

Abstract

France posted remarkable gains in employment in the second half of the 1990s, suggesting that, beyond cyclical factors, structural unemployment may have changed in the period. We provide a novel methodology to separate structural from cyclical labor market changes and apply it to French household level data from 1990 to 2000. We show that the equilibrium relationship between real wages and unemployment has improved significantly in France in the second half of the 1990s. Further calculations suggest that long-term unemployment will decline substantially in France with respect to its average level in the 1990s if this improved trade-off is not undone.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1621.

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Length: 42 pages
Date of creation: Jun 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1621

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Related research

Keywords: employment; wages; bargaining; structural change; labor market;

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References

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  1. Ours, J. C. van & Pfann, G. & Ridder, G., 1993. "Labour Demand and Equilibrium Wage Formation," Open Access publications from Tilburg University urn:nbn:nl:ui:12-153299, Tilburg University.
  2. Richard Layard & Stephen Nickell, 1998. "Labour Market Institutions and Economic Performance," CEP Discussion Papers dp0407, Centre for Economic Performance, LSE.
  3. Blanchard, O & Katz, L, 1996. "What We Know and Do Not Know about the Natural Rate of Unemployment," Working papers 96-29, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. John M. Abowd & Francis Kramarz, 1992. "A Test of Negotiation and Incentive Compensation Models Using Longitudinal French Enterprise Data," NBER Working Papers 4044, National Bureau of Economic Research, Inc.
  5. 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.
  6. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  7. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
  8. repec:fth:prinin:343 is not listed on IDEAS
  9. Francesco Daveri & Guido Tabellini, 2000. "Unemployment, growth and taxation in industrial countries," Economic Policy, CEPR & CES & MSH, vol. 15(30), pages 47-104, 04.
  10. Marcello M. Estevão, 2003. "Do Active Labor Market Policies Increase Employment?," IMF Working Papers 03/234, International Monetary Fund.
  11. Ch. GIANELLA, 2000. "Local unemployment and wages," Documents de Travail de la DESE - Working Papers of the DESE g2000-12, Institut National de la Statistique et des Etudes Economiques, DESE.
  12. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section..
  13. Bernard Salanié & Guy Laroque, 2000. "Une décomposition du non-emploi en France," Économie et Statistique, Programme National Persée, vol. 331(1), pages 47-66.
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Citations

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Cited by:
  1. DREGER, Christian & REIMERS, Hans-Eggert, 2011. "On The Role Of Sectoral And National Wage Components In The Wage Bargaining Process," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 11(1).
  2. Bassanetti, Antonio & Döpke, Jörg & Torrini, Roberto & Zizza, Roberta, 2006. "Capital, labour and productivity: What role do they play in the potential GPD weakness of France, Germany and Italy?," Discussion Paper Series 1: Economic Studies 2006,09, Deutsche Bundesbank, Research Centre.
  3. Dreger, Christian & Reimers, Hans-Eggert, 2010. "On the Role of Sectoral and National Components in the Wage Bargaining Process," IZA Discussion Papers 4908, Institute for the Study of Labor (IZA).

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