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A Conjecture on the Explanation for High Unemployment in the Industrialized Nations : Part I

  • Oswald Andrew J.

The paper conjectures that the high unemployment of the Western economies has been produced by the decline of the private house-rental market and the rise of home-ownership. Evidence is provided for the developed nations, the states of the USA, and the regions of the UK, Italy, France and Sweden. Although its calculations should be viewed as tentative, the paper's results imply that a 10 percentage point rise in the owner-occupation rate is associated with an increase of approximately 2 percentage points in the unemployment rate. This would be sufficient to explain a significant part of the rise in joblessness in the industrialized countries.

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/1995-1998/twerp_475.pdf
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Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 475.

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Length: 42 pages
Date of creation: 1996
Date of revision:
Handle: RePEc:wrk:warwec:475
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Web page: http://www2.warwick.ac.uk/fac/soc/economics/

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  1. Wadsworth, Jonathan, 1998. "Eyes Down for a Full House: Labour Market Polarisation and the Housing Market in Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 45(4), pages 376-92, September.
  2. Christofides, Louis N & Oswald, Andrew J, 1992. "Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 985-1002, August.
  3. Junankar, P.N. & Madsen, J.B., 1994. "Unemployment in the OECD: Models, Myths and Mysteries," Papers 278, Australian National University - Department of Economics.
  4. Hughes, Gordon & McCormick, Barry & McCormick, Barry, 1987. "Housing markets, unemployment and labour market flexibility in the UK," European Economic Review, Elsevier, vol. 31(3), pages 615-641, April.
  5. Carruth,a. & Hooker, N. & Oswald,A., 1997. "Unemployment Equilibria and Input Prices: Theory and Evidence from the United States," Papers 22, Centre for Economic Performance & Institute of Economics.
  6. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
  7. Björklund, Anders, 1984. "Unemployment and Mental Health: Some Evidence from Panel Data," Working Paper Series 120, Research Institute of Industrial Economics.
  8. Di Tella, R. & MacCulloch, R., 1996. "The Determination of Unemployment Benefits," Economics Series Working Papers 99180, University of Oxford, Department of Economics.
  9. Rowthorn, R E, 1977. "Conflict, Inflation and Money," Cambridge Journal of Economics, Oxford University Press, vol. 1(3), pages 215-39, September.
  10. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
  11. Bover, Olympia & Muellbauer, John & Murphy, Anthony, 1988. "Housing, Wages and UK Labour Markets," CEPR Discussion Papers 268, C.E.P.R. Discussion Papers.
  12. Hughes, G A & McCormick, B, 1985. "Migration Intentions in the U.K.: Which Households Want to Migrate and Which Succeed?," Economic Journal, Royal Economic Society, vol. 95(380a), pages 113-23, Supplemen.
  13. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Working Papers 1950, National Bureau of Economic Research, Inc.
  14. McCormick, Barry, 1983. "Housing and Unemployment in Great Britain," Oxford Economic Papers, Oxford University Press, vol. 35(0), pages 283-305, Supplemen.
  15. McCallum, John, 1983. "Inflation and Social Consensus in the Seventies," Economic Journal, Royal Economic Society, vol. 93(372), pages 784-805, December.
  16. Henley, A, 1996. "Residential Mobility, Housing Wealth and the Labour Market," Working Papers 96-15, University of Wales, Aberystwyth, Department of Economics.
  17. Oswald, Andrew J, 1986. "Unemployment Insurance and Labor Contracts under Asymmetric Information: Theory and Facts," American Economic Review, American Economic Association, vol. 76(3), pages 365-77, June.
  18. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  19. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  20. Grossman, Sanford J & Hart, Oliver D, 1981. "Implicit Contracts, Moral Hazard, and Unemployment," American Economic Review, American Economic Association, vol. 71(2), pages 301-07, May.
  21. Calmfors, Lars, 1993. "Lessons from the macroeconomic experience of Sweden," European Journal of Political Economy, Elsevier, vol. 9(1), pages 25-72, March.
  22. Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(3), pages 369-410.
  23. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
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