Unemployment follows the business cycle but the average rate also seems to fluctuate over decades. Here Patrick Minford and coauthors propose a political economy explanation and back it up with evidence from the inter-war period.
Kent Matthews, Patrick Minford, Ruthira Naraidoo, 09 July 2008
John Micklewright, Gyula Nagy, 30 April 2008
Most studies of unemployment benefits examine benefit levels or lengths of payment, but how benefit schemes are administered is also important. This column reports the results of a randomised control trial conducted in Hungary, which show that closer monitoring of some benefit recipients shortened their unemployment spell.
Gianmarco Ottaviano, Giovanni Peri, 17 April 2008
Immigration of less educated, younger Eastern Europeans and North Africans to Western Europe would economically benefit its educated and older population. This column, summarising research on immigration effects in Germany, suggests that, to fully reap the benefits from immigration, Western Europe should make its labour markets more competitive and accessible to outsiders (immigrants) and its welfare state more selective.
Emilia del Bono, Rudolf Winter-Ebmer, 25 February 2008
Over the last century careers or jobs that provide opportunities for promotion and advancement have become more desirable for females and labour market conditions that impede the establishment of stable careers early in their lives like unemployment, temporary jobs or involuntary turnover, may be reasons for a delay or even a permanent reduction in fertility. The authors of CEPR DP6719 explore how women’s fertility decisions are affected by these considerations and find that certain stages of their careers might be particularly sensitive to labour supply interruptions.
Gilles Saint-Paul, 01 February 2008
France has agreed a raft of labour market reforms. Here one of France’s most market-oriented labour economists evaluates the likely impact, concluding that it’s an improvement, but heightens incentives to become unemployed.
Samuel Bentolila, Juan Dolado, Juan Jimeno, 12 January 2008
Spain’s inflation-less drop in unemployment is due in large part to its immigration boom. If immigrants’ labour-supply behaviour comes closer to that of natives and inflation remains above target, a deeper slowdown or increasing immigration flows will be needed to bring it down.
Andrea Ichino, Rudolf Winter-Ebmer, Josef Zweimüller, Guido Schwerdt, 08 November 2007
Raising the retirement age is one of the standard solutions for Europe’s aging problem. But won’t this only increase their unemployment rate? New empirical evidence suggests that increasing the retirement age is unlikely to produce a band of workers who are too old to work but too young to retire.
Michael Burda, 23 October 2007
Germany’s equilibrium rate of unemployment has not fallen as much over the past two decades as in the Netherlands, Denmark, Ireland, and Britain. Unlike those successful reformers, Germany has not yet finished its supply-side homework. If it backslides now, it and the rest of Europe will pay the price when the next downturn comes.
Julia Lane, Harry Holzer , Fredrik Andersson, 15 October 2007
Research has long shown that workers who take temp jobs subsequently do better in the labour market. New research from the US suggests that the positive effects seem mostly to occur because those working for temp agencies have a higher chance of subsequently working for higher-wage firms.
Josep Pijoan-Mas, Claudio Michelacci, 28 May 2007
Since the 1970s, the number of hours worked per employee has fallen substantially in continental Europe, while it has remained roughly constant in the US. The authors of CEPR DP6314 show that this divergence in the number of hours worked per employee on the two sides of the Atlantic can be explained by the evolution of the respective labour market conditions over the last three decades.
Dennis Snower, Christian Merkl, Alessio Brown, 11 June 2007
Employment subsidies are often used to reduce both unemployment and earnings inequality together, a prime objective throughout the OECD. In CEPR DP6334, the authors compare the effectiveness of various employment subsidies in Germany and find that while hiring vouchers can be both effective and efficient if targeted appropriately, wage subsidies are too expensive and ineffective.
Laurent Gobillon, Thierry Magnac, Harris Selod, 19 March 2007
The authors of CEPR DP6198 and DP6199 focus on Paris to discover the effects of location on unemployment. They find that around 30% of the spatial disparities in duration of unemployment in Paris can be attributed to personal characteristics of workers, while around 70% can be attributed to characteristics of the local area.
Werner Eichhorst, Klaus F. Zimmermann, 23 April 2007
Only four instruments have led to positive results in the form of increased integration into the labour market - (i) placement vouchers; (ii) training programmes; (iii) wage subsidies; and (iv) business start-up grants. This translates to only around 28%, or €4.2 billion, of the total expenditure on active labour market policies.