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The Equilibrium Rate of Unemployment in Varying Micro- Institutional Settings

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  • Donatella Gatti

    (PSE & IZA)

Abstract

A major issue in the current economic debate is related to the striking difference betweenEurope, Japan and US concerning the level and evolution of unemployment. This paperexplores the micro determinants of these observed stylized facts. In a first part, atheoretical framework is presented allowing to address this comparative analysis. Thestarting point is the definition of different micro-institutional settings encompassing: (i) the structure of the firm; (ii) the system of education or vocational training; (iii) thenature of the labor market. In particular, the notion of mode of organization of the firmwill be defined. In a second part, a model is proposed which takes up a radicaleconomics perspective to analyze the choice made by firms about wage and effort, subject to their mode of organization. The main results point to the crucial role played by the mode of organization of the firm and the nature of workers' competence as key-determinants of the different observable levels of the unemployment rate across main developed countries.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Donatella Gatti, 2005. "The Equilibrium Rate of Unemployment in Varying Micro- Institutional Settings," Macroeconomics 0507010, EconWPA.
  • Handle: RePEc:wpa:wuwpma:0507010 Note: Type of Document - pdf
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    File URL: http://econwpa.repec.org/eps/mac/papers/0507/0507010.pdf
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    References listed on IDEAS

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    1. Anne Perrot & André Zylberberg, 1989. "Salaire d'efficience et dualisme du marché du travail," Revue Économique, Programme National Persée, vol. 40(1), pages 5-20.
    2. Bowles, Samuel, 1985. "The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian, and Marxian Models," American Economic Review, American Economic Association, pages 16-36.
    3. Lazonick, William & West, Jonathan, 1995. "Organizational Integration and Competitive Advantage: Explaining Strategy and Performance in American Industry," Industrial and Corporate Change, Oxford University Press, vol. 4(1), pages 229-270.
    4. D. Gatti, 1997. "Flexible Technology, Unemployment and Effort: The Role of the Organization of the Firm," Working Papers ir97004, International Institute for Applied Systems Analysis.
    5. Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters,in: Comparative Institutional Analysis, chapter 5, pages 57-58 Edward Elgar Publishing.
    6. Eyraud, Francois & Marsden, David & Silvestre, Jean-Jacques, 1990. "Occupational and internal labour markets in Britain and France," LSE Research Online Documents on Economics 21305, London School of Economics and Political Science, LSE Library.
    7. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, pages 511-528.
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    JEL classification:

    • E - Macroeconomics and Monetary Economics

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