Working Paper: CEPR ID: DP4328
Authors: Gilles Saint-Paul
Abstract: During the nineties, unemployment fell in a number of European countries while it remained high in others. This Paper discusses potential causes for that evolution in light of recent economic research, emphasizing obstacles to reform due to political constraints, the prevalence of ideology, and agency issues within those bureaucracies concerned with the unemployment problem. Some speculative thoughts are offered as to why those factors might be more stringent in countries where unemployment remained high.
Keywords: flexibility; ideology; labour market reform; political economy; unemployment
JEL Codes: D70; E24; J60
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor market rigidities (J48) | higher equilibrium unemployment rates (J64) |
| comprehensive labor market reforms (J08) | lower unemployment rates (J68) |
| differences in timing and extent of reforms (P39) | divergence in unemployment experiences (J64) |