Crisis, What Crisis? Patterns of Adaptation in European Labor Markets

33 Pages Posted: 12 Jul 2010

See all articles by Werner Eichhorst

Werner Eichhorst

Institute for the Study of Labor (IZA)

Michael T. Feil

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Paul Marx

IZA Institute of Labor Economics

Abstract

The current crisis, while of a global nature, has affected national labor markets to a varying extent. While some countries have experienced a steep increase in unemployment, employment in other developed economies has not fallen in parallel with a significant decline in GDP. Our analysis shows that labor market institutions frequently used to study employment performance can explain the development of unemployment in the situation of crisis in some clusters of countries much better than in others. One major factor to be incorporated in capturing national variations is the role of internal flexibility, in particular working time adjustment. This calls for a broader concept of labor market flexibility which takes into account different channels of adjustment.

Keywords: labor market institutions, internal flexibility, employment protection, economic crisis

JEL Classification: J23, J21, J58

Suggested Citation

Eichhorst, Werner and Feil, Michael T. and Marx, Paul, Crisis, What Crisis? Patterns of Adaptation in European Labor Markets. IZA Discussion Paper No. 5045. Available at SSRN: https://ssrn.com/abstract=1638481

Werner Eichhorst (Contact Author)

Institute for the Study of Labor (IZA) ( email )

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

Michael T. Feil

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Paul Marx

IZA Institute of Labor Economics ( email )

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

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