The Political Consequences of Unemployment

Universitat Pompeu Fabra, Dept. of Economics & Business, Working Paper No. 343

46 Pages Posted: 28 Feb 1999

See all articles by Gilles Saint-Paul

Gilles Saint-Paul

University of Toulouse I - GREMAQ-IDEI; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Abstract

We analyze the channels by which an ill-functioning labor market changes the preferences of the people for public policy and therefore the decisions that are made. We not only discuss labour market reform but other important aspects of policy making such as the size and structure of government spending. The class of mechanisms that we highlight can be summarized as showing that the very existence of unemployment generates political support for "sclerosis". This observation may help to explain the timid pace of reform, in particular the fact that any recovery removes reform measures from the political agenda, and the sometimes violent opposition generated by some measures, as we have seen mostly in France.

JEL Classification: E6, E24, J3, J6

Suggested Citation

Saint-Paul, Gilles, The Political Consequences of Unemployment. Universitat Pompeu Fabra, Dept. of Economics & Business, Working Paper No. 343. Available at SSRN: https://ssrn.com/abstract=145753 or http://dx.doi.org/10.2139/ssrn.145753

Gilles Saint-Paul (Contact Author)

University of Toulouse I - GREMAQ-IDEI ( email )

Manufacture des Tabacs
21 Allees de Brienne
Toulouse, 31000
France
+33 5 6112 8544 (Phone)
+33 5 6122 5563 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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