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Long-Term Unemployment: The Role of Wage Adjustments

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  • Philip E.T. Lewis

Abstract

The problem of long-term unemployment has, at last, taken centre stage in the policy debate with the publication of the Green Paper Restoring Full Employment. While economic growth will reduce the general level of unemployment, to return the long-term unemployed to work will require increased training and reduction of labour costs. More recently the concept of a ‘training wage’ whereby employers would be allowed to pay below the current award wage to previously long-term unemployed has received some support. The Green Paper did not give much attention to training wages, preferring instead to focus on wage subsidies. In this paper the case for wage adjustments is discussed and evaluated.

Suggested Citation

  • Philip E.T. Lewis, 1994. "Long-Term Unemployment: The Role of Wage Adjustments," The Economic and Labour Relations Review, , vol. 5(1), pages 11-20, June.
    • Handle: RePEc:sae:ecolab:v:5:y:1994:i:1:p:11-20
    DOI: 10.1177/103530469400500102
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    References listed on IDEAS

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    1. Blanchard, Olivier J. & Summers, Lawrence H., 1987. "Hysteresis in unemployment," European Economic Review, Elsevier, vol. 31(1-2), pages 288-295.
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