Social democracy and full employment

Full employment was the centrepiece of the economic policy of social democracy in the post-war period. Whilst the role of Keynesianism in policy making may be exaggerated, it offered the prospect of maintaining full employment without any section of society having to pay. Problems with the foreign balance and with the budget deficits, however, may require that some part of society has to pay with reduced consumption for full employment. This will tend to sharpen the distributive conflicts which, as Kalecki argued, are endemic to full employment capitalism and which eventually rendered it unsustainable by undermining profitability and the dynamism of private investment. The demand necessary to sustain full employment can be maintained by a balanced budget expansion provided the political support can be secured for the higher taxation and provided the institutions for containing distributional conflict can be developed. -- Vollbeschäftigung war das Hauptziel sozialdemokratischer Wirtschaftspolitik in der Nachkriegsära. Auch wenn die Rolle des Keynesianismus hinsichtlich der praktischen Politik überschätzt werden könnte, so stellte er doch in Aussicht, Vollbeschäftigung zu erhalten, ohne daß dies auf Kosten eines Teils der Gesellschaft ging. Im Falle einer unausgeglichenen Außenhandelsbilanz und bei Haushaltsdefiziten könnte es natürlich dazu kommen, daß für einige Gruppen in der Gesellschaft Vollbeschäftigung nur um den Preis eines verminderten Konsumniveaus zu haben ist. Dies könnte dann zu einer Verschärfung von Verteilungskonflikten führen, die, so Kalecki, zu einem Vollbeschäftigungskapitalismus gehören und die schließlich ein Stadium erreichen könnten, in dem durch Aushöhlung der Profitabilität und der Investitionsdynamik die Selbsterhaltungskräfte verschwänden. Die für die Sicherung der Vollbeschäftigung notwendige Nachfrage kann durch eine ausgewogene Budgetausweitung erhalten bleiben, vorausgesetzt, die notwendige politische Unterstützung für eine höhere Besteuerung kann gesichert und institutionelle Regelungen für eine Eindämmung der Verteilungskonflikte können entwickelt werden.

Unemployment and inequality

Analysis of contemporary unemployment has increasingly focussed on the position of the least skilled. The deterioration in their labour market position is first situated in the context of structural trends in the labour market. The development of labour market inequality in the 1980s is summarised and the deteriorating employment position of the unskilled, both in terms of registered unemployment, withdrawal from the labour market and falling relative earnings is documented. Explanations for these trends are discussed, with the distinction being drawn between those which focus on changes in technology and trade patterns and those which see declining overall demand for labour as the primary factor. Alternative policy responses are surveyed, with emphasis on their distributional implications. -- Analysen über die aktuelle Arbeitslosigkeit konzentrieren sich zunehmend auf die Situation der geringer Qualifizierten. Die Verschlechterung ihrer Arbeitsmarktposition rührt vor allem von den strukturellen Veränderungen auf dem Arbeitsmarkt her. Die Entwicklung der Ungleichheit auf dem Arbeitsmarkt wahrend der 80er Jahre wird zusammenfassend dargestellt und gleichzeitig die Verschlechterung der Arbeitsmarktposition der Ungelernten an Hand der Indikatoren ,,Registrierte Arbeitslosigkeit, ,,Rückzug vom Arbeitsmarkt und ,,Fallende relative Einkommen dokumentiert. Erklärungen für diese Trends werden diskutiert, wobei ein Unterschied gemacht wird zwischen denjenigen Erklärungen, die sich auf Veränderungen in Technologie- und Handelsmustern konzentrieren und den Erklärungen, die in der allgemein zurückgehenden Nachfrage nach Arbeit den Hauptgrund sehen. Unterschiedliche Politikreaktionen werden, vor allem im Hinblick auf ihre Verteilungswirkungen, vorgestellt.

Employment Inequalities

This paper documents the employment disadvantage faced by the less qualified part of the labor force and examines the factors that influence the differing extent of this disadvantage across OECD countries. We argue that employment rates for quartiles of the population ranked by educational qualification provide the best measure of employment disadvantage. We show that differences in these employment rates for the most- and least-educated quartiles vary substantially within Europe, but are not on average higher than those in the USA. The least qualified suffer the greatest employment disadvantage in countries in which the overall employment rates are low and, for men, the literacy test scores for the least qualified are relatively low. A high level of imports from the South appears to be associated with greater employment disadvantage, but there is no discernible tendency for a high level of wage dispersion, low benefits, or weak employment protection legislation to be associated with greater employment disadvantage. Labor market flexibility has not been the route by which some OECD countries have managed to minimize the employment disadvantage of the least qualified.

"Employment Inequalities"

This paper documents the employment disadvantage faced by the less qualified part of the labor force and examines the factors that influence the differing extent of this disadvantage across OECD countries. We argue that employment rates for quartiles of the population ranked by educational qualification provide the best m easure of employment disadvantage. We show that differences in these employment rates for the most- and least-educated quartiles vary substantially within Europe, but are not on average higher than those in the USA. The least qualified suffer the greatest employment disadvantage in countries in which the overall employment rates are low and, for men, the literacy test scores for the least qualified are relatively low. A high level of imports from the South appears to be associated with greater employment disadvantage, but there is no discernible tendency for a high level of wage dispersion, low benefits, or weak employment protection legislation to be associated with greater employment disadvantage. Labor market flexibility has not been the route by which some OECD countries have managed to minimize the employment disadvantage of the least qualified

Structural change under New Labour

The paper examines specific features of structural change in the UK since 1997, contrasting the decline in industrial jobs with the rise in a variety of service jobs. It examines the proximate causes of structural change, in particular whether the chronically slow growth of manufacturing output in the 1980s has persisted. The implications of this structural change are considered, particularly the effects on the balance of payments and regional employment patterns. The paper suggests that the main impact of government policies on regional employment may have been through the direct and multiplier effects of public expenditure

Export Market Performance of OECD countries: an empirical examination of the role of cost competitiveness

This paper investigates the relationship between export market shares and relative unit labour costs using a long panel of twelve manufacturing industries across fourteen OECD countries. We ask two questions: (a) how sensitive are export market shares to changes in relative costs and (b) what determines the degree of sensitivity? Although both costs and embodied technology are important, we find that neither can fully explain changing export positions. We explore whether the residual country-specific trends might be linked to Ѥeep' structural features of economies such as human capital investment and national ownership patterns. On the second question, the sensitivity of exports to labour costs is lower in high tech industries and in core ERM countries. The industry elasticities have increased over time, especially in industries subject to increasing product market competition. We discuss the implications of these findings for European Monetary Union.