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Labor Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence

Author

Listed:
  • Andrew Glyn
  • Dean Baker
  • Centre for Economic and Policy Research
  • Washington
  • David Howell
  • New School University
  • New York
  • John Schmitt

Abstract

This paper provides a critical view of the cross country literature on the impact of labour market institutions and policies on the evolving pattern of unemployment in OECD countries. Such widely used indicators as the generosity of unemployment insurance or the strength of trade unions are neither strongly correlated individually with unemployment nor contribute robust and well defined impacts on unemployment within increasingly sophisticated multivariate literature. Our own tests, with a comprehensive data set covering 1960-99, show how dependent the estimated effects are to the particular indicators used and periods covered and overall suggest that a relatively minor role for the institutions and policies in accounting for unemployment patterns.

Suggested Citation

  • Andrew Glyn & Dean Baker & Centre for Economic and Policy Research & Washington & David Howell & New School University & New York & John Schmitt, 2003. "Labor Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence," Economics Series Working Papers 168, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:168
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    References listed on IDEAS

    as
    1. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages 1-33, March.
    2. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
    3. Michael Bruno & Jeffrey D. Sachs, 1985. "Economics of Worldwide Stagflation," NBER Books, National Bureau of Economic Research, Inc, number brun85-1, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Unemployment; institutions; OECD;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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