Working Paper: CEPR ID: DP6681
Authors: Barbara Petrongolo; Christopher Pissarides
Abstract: In this paper we study the contribution of inflows and outflows to the dynamics of unemployment in three European countries, the United Kingdom, France and Spain. We compare performance in these three countries making use of both administrative and labour force survey data. We find that the impact of the 1980s reforms in Britain is evident in the contributions of the inflow and outflow rates. The inflow rate became a bigger contributor after the mid 1980s, although its significance subsided again in the late 1990s and 2000s. In France the dynamics of employment are driven virtually entirely by the outflow rate, which is consistent with a regime with strict employment protection legislation. In Spain, however, both rates contribute significantly to the dynamics, very likely as a consequence of the prominence of fixed-term contracts since the late 1980s.
Keywords: Job finding rates; Job separation rates; Unemployment dynamics
JEL Codes: E24; E32; J6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 1980s reforms in the UK (E65) | inflow rate (F21) |
| inflow rate (F21) | unemployment dynamics in the UK (J64) |
| outflow rate (F21) | unemployment dynamics in France (J60) |
| inflow rate (F21) | unemployment dynamics in Spain (J60) |
| outflow rate (F21) | unemployment dynamics in Spain (J60) |