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Labour-market performance in the OECD: some recent cross-country evidence

  • Sergio Destefanis
  • Giuseppe Mastromatteo

Purpose – The purpose of this paper is to assess the evolution of labour-market performance in the Organization for Economic Co-operation and Development (OECD) over the last decade, considering the robustness of the claims made in an important OECD follow-up study. Design/methodology/approach – The paper sets up an empirical framework calibrated on an important OECD follow-up study, and suggests some ways in which the impact of unobserved heterogeneity and outliers on policy estimates can be treated in a cross-section framework. The framework applies to the data for 30 OECD countries. Findings – The paper finds that changes in labour-market performance are inversely linked to lagged unemployment. Changes in the share of construction workers are also significant even in the presence of various kinds of policy change indicators. As far as the latter are concerned, the results highlight the role of unemployment benefits and, especially, active labour-market policies. Research limitations/implications – The kind of policy change indicators used do not allow the adoption of panel data techniques. Practical implications – An important policy role seems to emerge for unemployment benefit reforms and, even more so, active labour-market policies. The evidence also supports the contention that the construction sector is important for labour-market performance. Originality/value – The paper brings to the fore novel evidence about cross-country labour-market performance at a time when this issue is of high interest for citizens and policy-makers.

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Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 31 (2010)
Issue (Month): 7 (November)
Pages: 713-731

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Handle: RePEc:eme:ijmpps:v:31:y:2010:i:7:p:713-731
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  1. Belot, M.V.K. & van Ours, J.C., 2000. "Does the Recent Success of some OECD Countries in Lowering their Unemployment Rates lie in the Clever Design of their Labour Market Reforms?," Discussion Paper 2000-40, Tilburg University, Center for Economic Research.
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  12. Paul Krugman, 1994. "Past and prospective causes of high unemployment," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 23-43.
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  14. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
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