Labor Market Rigidities: At the Root of Unemployment in Europe
- (pp. 37-54)
AbstractThis paper studies the major institutional changes at the root of the increase in the west European unemployment trade in the last quarter century from below 3 percent to 11 percent. The institutional characteristics of wage bargaining and the legal rules hamper the self-equilibrating function of the labor market. The reservation wage, raised by the welfare state's rise, has affected the bargaining process, the wage level and the wage structure. Econometric evidence is presented. Since the mid-1980s, differences emerge, and the Scandinavian, the French-Mediterranean, the German, and the British-Dutch approach to the labor market can be distinguished.
Citation1997. "Labor Market Rigidities: At the Root of Unemployment in Europe." Journal of Economic Perspectives, 11 (3): 37-54. DOI: 10.1257/jep.11.3.37
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
- J21 Labor Force and Employment, Size, and Structure
- J64 Unemployment: Models, Duration, Incidence, and Job Search