Combatting unemployment / Richard Layard and Stephen J. Nickell ; edited by Werner Eichhorst, Klaus F. Zimmermann.

Format:

Book

Author/Creator:

Layard, Richard, 1934-

Contributor:

Nickell, S. J.

Eichhorst, Werner

Zimmermann, Klaus F.

John Lammey Stewart Memorial Library Fund.

Series:

IZA prize in labor economics series

Language:

English

Subjects (All):

Unemployment.

Labor market.

Physical Description:

xiv, 253 pages : illustrations ; 23 cm.

Place of Publication:

Oxford ; New York : Oxford University Press, 2011.

Summary:

Why is unemployment higher in some countries than others? Why does it fluctuate between decades? Why are some people at greater risk than others?

Layard and Nickell have worked on these issues for thirty years. Their famous model, first published in 1986, is now used throughout the world. It asserts that unemployment must be high enough to reduce the real wages for which workers settle to the level justified by productivity. So that affects 'wage push'? The authors showed early on that the key factors affecting 'wage push' are how unemployed workers are treated and how wages are negotiated. If unemployed people get benefits without being required to accept jobs, vacancies go unfilled and mass unemployment results. The solution is welfare-to-work policies like those now introduced in most Parts of the world.

Since 1986, the authors have proposed these policies in a series of key... articles reproduced in this book. Their original analysis explains the subsequent movement of unemployment over the last two decades. They conclude the book with a new chapter on what should be done in the recession: no-one, they say, should be given unemployment benefit beyond a year, after which they should be offered work. Book jacket.

Contents:

1 The Labor Market 8

1.1 Aggregate Unemployment 10

1.1.1 Some Basic Facts 10

1.1.2 A Labor Market Model 14

1.1.3 Unemployment and Wage Pressure 21

1.2 Influences on Wage Pressure 27

1.2.1 The Duration of Unemployment and the u/v Curve 28

1.2.2 Employment Protection 32

1.2.3 Mismatch 33

1.2.4 Benefits 36

1.2.5 Unions 38

1.2.6 Incomes Policy 42

1.2.7 Taxes and Import Prices 43

1.2.8 Conclusion 44

1.3 Relative Wage Rigidity and the Structure of Employment 44

1.3.1 Industry 44

1.3.2 Region 45

1.3.3 Skill 46

1.3.4 Age 48

1.3.5 Sex 49

1.3.6 Conclusion 51

2 Why Does Unemployment Persist? 52

2.1 Introduction and Summary 52

2.1.1 How the NAIRU is Determined 54

2.1.2 What Stops the Wage Dropping and What Causes Persistence? 57

2.1.3 Insider Power 57

2.1.4 Outsider Ineffectiveness 60

2.1.5 Some Concepts 63

2.2 Helpful Theories of Unemployment 64

2.2.1 Efficiency Wages 64

2.2.2 Union Bargaining 66

3 Combatting Unemployment: Is Flexibility Enough? 71

3.1 Country Differences 74

3.2 Policies to the Unemployed 78

3.2.1 Benefits 78

3.2.2 Active Labor Market Policies (ALMP) 79

3.3 Wage Bargaining 83

3.4 Skills Imbalance 85

3.4.1 Empirical Work 88

3.5 Employment Protection 88

3.5.1 Theoretical Background 88

3.5.2 Evidence on Unemployment Dynamics 90

3.5.3 Evidence on Equilibrium Unemployment 94

3.5.4 Conclusions 95

3.6 Taxes On Employment 96

3.7 Work-Sharing And Early Retirement 100

3.7.1 Theoretical Issues 100

3.7.2 Empirical Analysis 102

3.8 Conclusions 103

4 Labor Market Institutions and Economic Performance 104

4.1 Introduction 105

4.2 Economic performance 106

4.3 Labor Market Institutions 113

4.3.1 Taxes on Labor 113

4.3.2 Laws and Regulations on Employee Rights 115

4.3.3 Trade Unions, Wage Bargaining, and Minimum Wages 117

4 3.4 Benefit Systems and Active Labor Market Policies 121

4.3.5 Skills and Education 122

4.3.6 Barriers to Geographical Mobility 124

4.4 Unemployment, Growth, and Labor Market Institutions 126

4.4.1 The Determination of Equilibrium Unemployment 126

4.4.2 Unemployment and Growth 129

4.4.3 Labor Market Institutions and Growth 131

4.5 Some Summary Regressions Explaining Growth and Labor Supply 132

4.6 Labor Taxes 136

4.6.1 Differential Taxes 138

4.6.2 Total Tax Rates 139

4.6.3 Marginal Tax Rates and Progressivity 142

4.6.4 Summary 142

4.7 Labor Standards and Employment Protection 143

4.7.1 Labor Standards 143

4.7.2 Employment Protection 144

4.7.3 Summary 147

4.8 Unions and Wage setting 148

4.8.1 Unemployment 149

4.8.2 Growth 150

4.8.3 Summary 151

4.9 Minimum Wages 152

4.9.1 Unemployment 152

4.9.2 Growth 152

4.10 Social Security Systems and Active Labor Market Policies 153

4.10.1 Unemployment 153

4.10.2 Summary 154

4.11 Skills and Education 154

4.11.1 Summary 163

4.12 Conclusions 164

5 Unemployment: Macroeconomic Performance and the Labor Market 166

5.1 The Determinants of Equilibrium Unemployment 166

5.2 Evidence on the Factors Influencing Equilibrium Unemployment 169

5.3 Our Original Policy Conclusions and How Things Have Changed 172

5.4 Explaining Changes in Unemployment in OEGD Countries: Overview 175

5.5 Specific Changes in Labor Market Institutions and their Impact on Unemployment 183

5.5.1 The Unemployment Benefit System 183

5.5.2 Systems of Wage Determination 187

5.5.3 Employment Protection 190

5.5.4 Labor Taxes 190

5.5.5 Labor Market institutions and the Successes and Failures of the 1990s 191

5.5.6 Summary and Conclusions 194

5.6 Unemployment, Inactivity, and Happiness 194

5.7 Last Words 195

6 Policies For Full Employment 197

6.1 The Lump-Of-Labor Fallacy 199

6.2 Unemployment When Vacancies Abound 202

6.3 How'Unerriployed People Are Treated 203

6.3.1 Benefit Conditionality 206

6.3.2 Active Labor Market Policy 207

6.3.3 Additionality 208

6.4 Older Workers 210

6.5 Mothers 211

6.6 Wage Flexibility And Regional Unemployment 211

6.7 Employment Flexibility 213

6.8 Conclusion: Flexibility Is Not Enough 214

7 A Final Note: Unemployment and the Current Recession 215

7.1 The Job Guarantee 218

7.2 The Psychic Cost of Unemployment 211.

Notes:

Includes bibliographical references (pages 230-241) and index.

Local Notes:

Acquired for the Penn Libraries with assistance from the John Lammey Stewart Memorial Library Fund.

ISBN:

0199609780

9780199609789

OCLC:

703374426

Publisher Number:

99943843797