The Unemployment Challenge in Europe

Arbeitslosigkeit; Arbeitsmarktpolitik; Langzeitarbeitslosigkeit; Ungelernte Arbeitskräfte; EU-Politik; EU-Staaten

Poverty and Worklessness in Britain

Relative poverty in the UK has risen massively since 1979 mainly because of increasing worklessness, rising earnings dispersion and benefits indexed to prices, not wages. So poverty is now at a very high level. The economic forces underlying this are the significant shift in demand against the unskilled which has outpaced the shift in relative supply in the same direction. This has substantially weakened the low-skill labour market which has increased both pay dispersion and worklessness, particularly among low-skilled men. The whole situation has been exacerbated by the very long tail in the skill distribution, so that over 20 per cent of the working age population have very low skills indeed (close to illiterate). Practical policies discussed include improving education and overall well-being for children in the lower part of the ability range, raising wage floors, New Deal policies, tax credits and benefits for the workless. Overall, I would argue that without reducing the long tail in the skill distribution, there is no practical possibility of policy reducing relative poverty to 1979 levels.Poverty, Worklessness, Wage dispersion, Disability

Employment Patterns in OECD Countries

This paper studies the dynamics of labour demand and the determinants of employment rates across the OECD. We find: (i) labour demand adjusts less rapidly when employment protection is more strict and union density is higher; (ii) there is no evidence that overall job turnover is influenced by employment protection; (iii) union density and coverage are negatively related to employment/population ratios, although this effect can be entirely offset by coordination; (iv) strict employment protection laws are strongly associated with lower employment rates for women and young people but have no impact on the rates for prime age men.Employment, wages, inactivity

Wages

Empirical analyses of longitudinal data on some 66 manufacturing companies on Britain lead us to the following three conclusions. First, agreed reductions in restrictive work practices lead to increases in productivity. Second, controlling for such agreed reductions, there is some weak evidence that both relative pay and aggregate labour market slack have some positive impact on productivity. Third, falls in market share or declines in the financial health of companies lead to both lower pay rises and reductions in restrictive practices.

How Does Financial Pressure Affect Firms?

How does monetary policy work? While one aspect of the investigation has focused on the behaviour of consumers, another has concentrated on the behaviour of companies faced with the kind of financial pressures associated with tight monetary policy. The general focus in this area is on the impact of financial constraints on investment expenditures including fixed capital and inventories. Our purpose is to shift this focus somewhat and to concentrate on the impact of financial pressure on other aspects of company behaviour. We first discuss briefly the theoretical background and the empirical formulation. Then, using panel data on a large number of UK companies, we derive a number of results.

Patterns of Work Across the OECD

Market work per person of working age differs widely across the OECD countries and there have been some significant changes in the last forty years. How to explain this pattern? Taxes are part of the story but much remains to be explained. If we include all the elements of the social security systems like early retirement benefits, sickness and disability benefits and unemployment benefits, then we can capture some aspects of the overall pattern but still a lot remains unexplained. The story favoured by Alesina et al. (CEPR DP.5140, 2005) is that the nexus of strong unions, generous welfare and social democracy implies both high taxes and pressure in favour of work-sharing in response to adverse shocks. This story, however, falls foul of the simple fact that most Scandinavian countries now do much more work than the French and Germans despite having stronger unions, more generous welfare, higher taxes and more social democracy. Ultimately, we are forced into the position that there is no simple story. Some of the broad patterns can be explained but there remain country specific factors which are hard to identify but lead to substantial differences from one country to another.work, working hours, employment