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Beyond Eurosclerosis

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  • Tito Boeri
  • Pietro Garibaldi

Abstract

"Europe no longer suffers from Eurosclerosis; unemployment, notably long-term unemployment, had decreased substantially for more than a decade. Mobility across labour market states increased in those countries where unemployment has been falling the most. Institutional reforms -- such as declining employment protection for new entrants in the labour market and less generous unemployment benefits -- account for this increase in mobility. Focusing on these reforms, we rationalize why EU workers, including those with permanent contracts, are increasingly unhappy about labour market conditions in spite of the disappearance of mass unemployment in Europe. Due to these perceptions, policy reversals cannot be ruled out. Governments wishing to minimize the risk of going back to Eurosclerosis should move towards flexicurity configurations, compensating workers for higher risks of job loss, and introduce tenure tracks to the labour market, preventing the development of dual labour market structures. This would avoid dissipating the employment gains of the last decade during this recession." Copyright (c) CEPR, CES, MSH, 2009.

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  • Tito Boeri & Pietro Garibaldi, 2009. "Beyond Eurosclerosis," Economic Policy, CEPR;CES;MSH, vol. 24, pages 409-461, July.
  • Handle: RePEc:bla:ecpoli:v:24:y:2009:i::p:409-461
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    2. Enrico Marelli & Francesco Pastore, 2010. "Labour, productivity and growth: an introductory essay," International Journal of Manpower, Emerald Group Publishing, vol. 31(7), pages 701-712, October.
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    4. Bruno Contini, 2009. "Youth Employment in Europe: Institutions and Social Capital Explain Better than Mainstream Economics," LABORatorio R. Revelli Working Papers Series 97, LABORatorio R. Revelli, Centre for Employment Studies.
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    14. Lothar Funk, 2010. "Die europäische Flexicurity-Strategie : ein Überblick zu wichtigen Vor- und Nachteilen. The European Flexicurity-Strategy : A Survey on Important Pros and Cons," Duesseldorf Working Papers in Applied Management and Economics fobe15, Duesseldorf University of Applied Sciences.
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