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A Picture of European Unemployment: Success and Failure

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  • Stephen Nickell

Abstract

Average unemployment in Europe today is relatively high compared with OECD countries outside Europe. The majority of countries in Europe today have lower unemployment than any OECD country outside Europe, including the US. These two fa cts are consistent because the four largest countries in Continental Western Europe namely, France, Germany, Italy, Spain, (the Big Four), have very high unemployment and most of the rest have comparatively low unemployment. This variability is highly informative because the fifteen European countries which we consider have more or less independent labour markets in practice, despite 'free' movement of labour. Using this information we see how changes in the structure of the various labour markets explain a substantial proportion of the secular fluctuations in unemployment in the various countries. In particular, we pin down some of the particular factors which enable us to understand why some European countries have been able fully to recover from the unemployment disasters of the early 1980s whereas some have not.

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  • Stephen Nickell, 2003. "A Picture of European Unemployment: Success and Failure," CEP Discussion Papers dp0577, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0577
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    Cited by:

    1. Heshmati Almas & Karlson Nils & Box Marcus, 2013. "Generality, State Neutrality and Unemployment in the OECD," Global Economy Journal, De Gruyter, vol. 13(3-4), pages 333-358, December.
    2. Jörn-Steffen Pischke, 2004. "Labor Market Institutions, Wages and Investment," CEP Discussion Papers dp0652, Centre for Economic Performance, LSE.
    3. James Banks & Richard Disney & Alan Duncan & John Van Reenen, 2005. "The Internationalisation of Public Welfare Policy," Economic Journal, Royal Economic Society, vol. 115(502), pages 62-81, March.
    4. Batyra, Anna & Sneessens, Henri R., 2010. "Selective reductions in labor taxation: Labor market adjustments and macroeconomic performance," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 531-543, July.
    5. Carlos J. Rodriguez-Fuentes & Antonio Olivera-Herrera & David Padron-Marrero, 2004. "Monetary policy and inflation persistence in the Eurozone," ERSA conference papers ersa04p218, European Regional Science Association.
    6. Stephen Nickell, 2004. "Poverty And Worklessness In Britain," Economic Journal, Royal Economic Society, vol. 114(494), pages 1-25, March.
    7. Anna Batyra & David de la Croix & Olivier Pierrard & Henri Sneessens, 2016. "Structural changes in the labor market and the rise of early retirement in Europe," CREA Discussion Paper Series 16-13, Center for Research in Economic Analysis, University of Luxembourg.
    8. Ghazala Azmat & Alan Manning & John Van Reenen, 2007. "Privatization, Entry Regulation and the Decline of Labor's Share of GDP: A Cross-Country Analysis of the Network Industries," CEP Discussion Papers dp0806, Centre for Economic Performance, LSE.
    9. Bartels, Bernhard, 2009. "The monetary transmission mechanism in the euro area: A VAR-analysis for Austria and Germany," Kiel Advanced Studies Working Papers 452, Kiel Institute for the World Economy (IfW).
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    12. Jianping Zhou, 2006. "Reforming Employment Protection Legislation in France," IMF Working Papers 06/108, International Monetary Fund.
    13. Parello, Carmelo Pierpaolo, 2011. "Labor market rigidity and productivity growth in a model of innovation-driven growth," Economic Modelling, Elsevier, vol. 28(3), pages 1058-1067, May.
    14. Ron Smith & Gylfi Zoega, 2005. "Unemployment, Investment and Global Expected Returns: A Panel FAVAR Approach," Birkbeck Working Papers in Economics and Finance 0524, Birkbeck, Department of Economics, Mathematics & Statistics.
    15. Cook, David & Xu, Juanyi, 2015. "Eurosclerosis and international business cycles," Journal of International Economics, Elsevier, vol. 95(1), pages 54-67.
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    17. Huang, Li-Hsuan & Huang, Julia Hsin-Yi, 2013. "Does Labor Market Rigidity Matter for Economic Performance? Evidence from the Four Asian Tigers," MPRA Paper 57905, University Library of Munich, Germany.
    18. van Ours, J.C., 2003. "Has the Dutch Miracle Come to an End?," Discussion Paper 2003-32, Tilburg University, Center for Economic Research.
    19. Deffains, Bruno & Demougin, Dominique, 2008. "Legal competition, political process and irreversible investment decisions," European Journal of Political Economy, Elsevier, vol. 24(3), pages 615-627, September.
    20. Sener, Fuat, 2006. "Labor market rigidities and R&D-based growth in the global economy," Journal of Economic Dynamics and Control, Elsevier, vol. 30(5), pages 769-805, May.
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    More about this item

    Keywords

    unemployment; institutions;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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