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The European Employment Problem

  • Lindbeck, Assar

    ()

    (Institute for International Economic Studies, Stockholm University)

How do we explain the poor employment performance in Western Europe since about the mid-1970s? This question is in fact twofold: what initiated the dramatic rise in unemployment, and what mechanisms have made it continue for so long? My attempts to answer these questions form the basis for a discussion of various policy options. A main point of the paper is the complex interaction, often in the form of complementarities, between different explanatory factors behind the West European employment problem. Unfortunately, this complexity makes it difficult to test and estimate attempted explanations. Moreover, the complementarities between different factors often preclude any positive effects of isolated policy actions on the employment situation; a battery of policy actions seems necessary.

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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 616.

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Length: 25 pages
Date of creation: 29 Oct 1997
Date of revision:
Handle: RePEc:hhs:iiessp:0616
Contact details of provider: Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/
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  1. C Bean, 1992. "European Unemployment: A Survey," CEP Discussion Papers dp0071, Centre for Economic Performance, LSE.
  2. A Bjorklund & Richard Freeman, 1995. "Generating Equality and Eliminating Poverty the Swedish Way," CEP Discussion Papers dp0228, Centre for Economic Performance, LSE.
  3. Laurence M. Ball, 1997. "Disinflation and the NAIRU," NBER Chapters, in: Reducing Inflation: Motivation and Strategy, pages 167-194 National Bureau of Economic Research, Inc.
  4. Robert J. Gordon, 1987. "Wage Gaps vs. Output Gaps: Is There a Common Story for All of Europe?," NBER Working Papers 2454, National Bureau of Economic Research, Inc.
  5. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
  6. Paul Krugman, 1994. "Past and prospective causes of high unemployment," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Jan, pages 49-98.
  7. Freeman, Richard B, 1995. "The Large Welfare State as a System," American Economic Review, American Economic Association, vol. 85(2), pages 16-21, May.
  8. Dennis J. Snower & David T. Coe, 1996. "Policy Complementarities; The Case for Fundamental Labor Market Reform," IMF Working Papers 96/93, International Monetary Fund.
  9. Snower, Dennis J., 1994. "Converting Unemployment Benefits into Employment Subsidies," CEPR Discussion Papers 930, C.E.P.R. Discussion Papers.
  10. Michael Bruno & Jeffrey D. Sachs, 1985. "Economics of Worldwide Stagflation," NBER Books, National Bureau of Economic Research, Inc, number brun85-1, November.
  11. Nickell, Stephen & Bell, Brian, 1996. "Changes in the Distribution of Wages and Unemployment in OECD Countries," American Economic Review, American Economic Association, vol. 86(2), pages 302-08, May.
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