Working Paper: CEPR ID: DP958
Authors: Dennis J. Snower
Abstract: This paper explores the interrelation between the degree of unemployment persistence and the unemployment-productivity trade-off. The analysis suggests that the more effective are structural labour market policies (designed to change labour market institutions and laws, such as job security legislation) in making wages and prices more responsive to current unemployment and making unemployment less persistent, the less effective will be the growth-promoting supply-side policies (such as training schemes) in reducing unemployment.
Keywords: unemployment; productivity; unemployment persistence; inflation
JEL Codes: E31; E32; J23; J31; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| structural labour market policies (J48) | unemployment persistence (J64) |
| increase in inflation responsiveness parameter (r) (E31) | unemployment persistence (J64) |
| increase in inflation inertia parameter (i) (E31) | unemployment persistence (J64) |
| structural policies (H19) | effectiveness of supply-side policies in reducing unemployment (E65) |
| policies that reduce severance pay and simplify firing procedures (J65) | unemployment persistence (J64) |
| structural labour market policies (J48) | responsiveness of wages and prices to current unemployment (J64) |
| structural labour market policies (J48) | responsiveness of wages and prices to past unemployment (J64) |